Chinese Take Out

President Obama’s trip to China has been accompanied by the usual concerns about human rights abuses and the value of the Yuan that have troubled Sino-American relations for the past two decades. This trip has also raised a relatively new concern about China: that it is not pulling its weight on international problems. Stephanie Kleine-Ahlbrandt of the International Crisis Group writes that China is a “global free-rider,” for failing to help the U.S. take action against Iran and North Korea. Over at the New York Times, China is similarly charged with needing to “play an even stronger international role,” including assisting the U.S. with the remaining two-thirds of the axis of evil.

The objection that China is free-riding is silly and myopic. To free ride is to fail to contribute to a public good that you enjoy. In order for China to free-ride on the proliferation issues in North Korea and Iran, China has to believe that a change in the status quo would significantly damage their national interests, which is not at all clear. On Iran, the Times notes, China “seems more concerned about its own voracious energy needs, and Iran’s ability to satisfy them.” So China is looking out for its own national interests, perhaps to the detriment of other states in the international system? Would other states dare to do this?

When Nixon made the bold opening with China nearly three decades ago, he hoped that the Chinese would exert pressure on the North Vietnamese to help bring an end to the war in Vietnam that would benefit the United States. The Chinese, with little to gain from an end to the war, did not fulfill Nixon’s wishes. The premise of free-rider arguments is that China and the United States want the same things in their foreign policies, when, in fact, they do not. Thus, there is no free-riding. [Climate change is a different issue, but unfortunately, the United States is not much better.]

The underlying concept here is soft power and the United States general inability to use it effectively with the Chinese. The Obama administration needs to get China to “want what we want.” This moves outside the realm of international bargaining (and discussions of American’s limited leverage over the Chinese) to focus on how China should perceive the international system. Increasing Chinese significance in the international system will change Chinese interests, but not necessarily cause them to align with the United States. Unfortunately, over the medium term it seems unlikely that China’s interests will mirror those of the United States due to economic, domestic political, cultural, and geo-strategic reasons.

Why Aren't the Democrats Smiling?

It was a monumental accomplishment - on Saturday, November 7th the U.S. House of Representatives became the first house of Congress to endorse a plan for universal health coverage in America. Nancy Pelosi and the House leadership cut deals, made promises, and were able to scrap together 219 Democrats and 1 Republican to gain a 220 to 215 vote margin of victory. So why aren't the Democrats smiling? Because one of the deals struck to ensure passage of the bill threatens to consume the Democratic Party in a civil war over the issue of abortion. To win the votes of conservative and pro-life Democrats Nancy Pelosi allowed a floor vote on an amendment that would bar the use of any public funds to subsidize private insurance plans that covered abortion. The amendment, offered by Rep. Bart Stupak (D-MI), passed by a vote of 240 to 194 - of all the votes cast on the health care bill, it was the most bipartisan.

The Stupak amendments was crucial to passing the bill, but it has opened a deep wound in Democratic Party unity and may well derail final passage of health reform. Pro-choice Democrats are threatening to oppose any final bill that maintains the Stupak language and Senate moderates are demanding that the language remain. All of this points to growing threat to the Democrat's majority status.

Democrats regained the majority in the House and Senate by recruiting conservative candidates to run in moderate and conservative districts - the strategy worked, but the consequence is a more diverse party caucus. Democrats now face the real possibility of a push by the party's liberal base to purge moderate and conservative members. All at a time when election results in Virginia and New Jersey, coupled with recent polling data from Gallup, show that moderate and independent voters are flocking to the GOP. According to Gallup, Independents prefer Republicans on the generic congressional ballot by a 52 to 30 margin. In fact, Gallup says that the GOP has not polled this well since 1994 and 2002 - two mid-term election cycles that were very good for Republicans.

And it gets worse for Democrats. How has the public reacted to the historic vote on Saturday? By increasing their level of opposition to the health reform bill. According to Pollster.Com, public opposition to health reform legislation has risen. In fact, the most recent poll by Pew shows that the public opposes the reform by a 9 point margin.

The Senate will begin debate on health reform next week, expect a bitter battle over abortion, the public option, and immigration. And don't expect any quick or easy resolutions. So worried is the White House that they are now openly hinting at the possibility of passing the bill via reconciliation, a risky parliamentary trick that would certainly enflame public opinion.

Why Health Reform Will Fail (To Pass) - Part Two

I wanted to provide an update to my prior post in which I explained why I think health reform will ultimately fail to pass. This weekend, in an historic vote, the House passed health care reform by a very narrow 220-215 vote. Never before has any house of Congress passed legislation for universal health care in America. So does this alter my prediction? Hardly - in fact I am more convinced than ever that no bill will reach the President's desk. And the seeds of its destruction were sown in the deals made to reach 220 votes in the House. To win the votes of pro-life Democrats Speaker Pelosi allowed a vote on an amendment offered by Rep. Bart Stupak (D-Mich.) that would prevent the use of federal subsidies to pay for insurance that covers elective abortion. The amendment was adopted with the votes of 64 Democrats. Pro-choice Democrats were angry, but they knew that the bill could not pass without the votes of pro-life Democrats, so they accepted the amendment. Now the bill has moved to the Senate, where moderate Democrats have made it clear that they too will demand a bill that bars any federal funds for abortion. So, the Senate is unlikely to pass a bill if it does not include the Stupak language. Problem is 40 pro-choice Democrats in the House have now signed a letter pledging to vote against any House/Senate compromise bill that includes the Stupak amendment. If the Conference Committee agrees to a bill with the Stupak language it will lose the 40 pro-choice votes in the House and fail.  If, on the other hand, the Conference strips the Stupak language then it would lose the votes of pro-life Democrats in the House and the Senate and fail to pass. What must be remembered is that in the Senate, Conference Reports can be filibustered - it's rare, but allowed. So now add abortion to the list of reasons why health reform will fail - and later, expect me to add immigration policy to the growing list.


Original Post
There has been much news this week about the momentum for health reform. House Speaker Nancy Pelosi has just introduced a 1,990 page bill representing the House version of reform, complete with a public option that would allow the government to negotiate payment rates with providers. On the Senate side, Majority Leader Harry Reid made news earlier this week when he announced that the Senate bill would include a public option with an allowance for states to “opt-out” of the program.

Given these developments there is now a sense of inevitability that health reform will pass and be signed into law by President Obama either this year or early next year. I’m not so certain. In fact, I am increasingly convinced that no reform legislation will make it to the president’s desk.

Allow me to explain why…

The Public Option
For too long the press has been obsessed over the question of the public option, as if it were the only point of contention between the House and the Senate. The truth of the matter is that the debate over the public option was as much about disagreements within the House and within the Senate as it was about a disagreement between the two bodies. In the House, Democrats can be divided into three camps 1) those who demanded a public option that paid doctors a fee linked to Medicare reimbursement rates, 2) those who supported a public option but wanted negotiated reimbursement rates (mostly rural state members where Medicare rates are low), and 3) those who simply oppose creation of a public option (mostly Blue Dogs who hail from conservative districts). There are 256 Democrats in the House and it takes 218 votes to pass any legislation – so Democratic leadership had to find a compromise. In the end, Pelosi went with group 2 (negotiated reimbursement) based on the assumption that many in group 1 and perhaps a few from group 3 would come on board. At last count, Pelosi is still short of the 218 votes; so passage in the House is still an open question.

In the Senate, disagreement over the public option and the form it should take is a bit more complicated, but Senators can also be grouped. There are 1) those who support a public option but would allow states to “opt-out”, 2) those who favor the creation of a trigger that would create a public option if other reforms efforts fail, 3) those who support allowing states to create their own public option, and 4) those who oppose the creation of a public option. Harry Reid has decided to go with group 1 and the opt-out provision in hopes that it would represent an acceptable compromise. The problem that Reid faces is that any bill requires 60 votes given the likelihood of a filibuster. There are only 60 Democrats in the Senate and only 1 potential GOP vote – Maine’s Olympia Snowe – so Reid cannot afford to lose anyone. So far Snowe has said that she opposes the opt-out approach and Joe Lieberman (CT) (and Independent who caucuses with the Democrats) has said the he to will seek to block such an approach as well. By most counts Reid is about 5 votes shy of the 60 he needs. Trouble is, if the opt-out provision comes to the floor as part of the bill any effort to strip it out via amendment would also need to overcome the 60 vote hurdle – and there may be 41 Democrats who want to keep it. So Reid finds himself lacking the votes to pass legislation with the public option opt-out and possibly lacking the votes to remove the opt-out from the bill. As such, reform could easily die in the Senate.

But let’s assume that the House and Senate do pass their bills. Then a conference committee will be convened for the purpose of reconciling the differences. With regard to the public option there are key differences between the House and Senate. The House bill would not allow for an opt-out and it is doubtful that House liberals would accept such a provision; likewise, the Senate could not muster enough votes to pass a public option without an opt-out. The greater threat to compromise between the House and Senate would be the elimination of the public option in the Senate version. It is unlikely that Pelosi could wrangle the 218 votes needed for compromise legislation with no public option, even with the provision for a trigger. So the public option could derail passage in the House, in the Senate, and especially in the final stage of compromise between the two bodies.

But the public option is just one point of disagreement. The House and Senate also differ on how to pay for reform and how to achieve universal coverage. The differences are significant and philosophical and raise serious questions about whether compromise can be attained.

Mandates
Employer provided insurance is the principle source of health insurance for Americans under the age of 65 (99% of those over 65 have Medicare). About 60% of the non-elderly population receives health insurance through an employer (or a parent/spouse/guardian’s employer). As health care costs have increased more and more employers are opting to no longer provide insurance. But 83% of the uninsured live in a family headed by at least one employed person. As such, many support requiring employers to provide insurance as a way to expand coverage. To that end, the House legislation requires that employers provide insurance coverage to their employees or face a penalty equal to 8% of total payroll. The Senate legislation does not require employers to provide insurance, but is expected to contain a provision stipulating that if an employer has any uninsured employees who receive a federal subsidy to purchase insurance that employer would face a fine of $750 multiplied by its total workforce. It is an odd provision to be certain, but well short of a mandate. Given that individual insurance costs approximately $5,000 per year, and that most employers pick up the tab for 75% of that cost, a $750 fine per employee may seem like a bargain compared to providing health insurance. It is unlikely that a strict employer mandate could pass in the Senate and equally questionable whether progressive members of the House would accept any compromise that eliminated the employer mandate. The House bill also contains an individual mandate to purchase health insurance, those who fail to do so face a fine equal to 2.5% of their adjusted gross income. In the Senate the individual mandate has been all but eliminated with individuals who fail to purchase insurance facing a maximum fine of $750 per year, and that fine is phased-in slowly over the next 7 years. Given that individual insurance costs about $5,000 per year, the $750 fine may not motivate many to purchase insurance. House Democrats view the mandates as essential to maximizing coverage, many Senate Democrats view mandates as being too burdensome and punitive.

Taxes
Concern over rapidly rising deficits and President Obama’s pledge that he will not sign any bill that exceeds $900 billion over the next ten years or that “added one dime” to the national debt has forced the House and Senate to find ways to pay for health care reform. Not surprisingly each found its own way. The House would fund a substantial portion of its reform via a proposed 5.4% surtax on individuals earning more than $500,000 per year and couples earning more than $1 million. In the Senate income tax increases are a non-starter, instead the Senate has proposed a 40% excise tax on extravagant health plans – so-called Cadillac plans – defined as those that cost more than $8,000 a year for individuals and $21,000 for families. The argument being that this would keep the source of new revenue within the existing health care system and it could discourage such extravagant plans in the future, plans that encourage the overuse of services. The tax on these insurance plans will go nowhere in the House given that many of these Cadillac are in fact the result of years of bargaining on the part of organized labor. Labor is a key constituent of the Democratic Party, labor opposes the Senate tax, and it would never survive the House. The House and Senate taxes are essential to paying for the bills, yet it is hard to see how the House and Senate can come to any compromise on this key funding issue.

In the end, I simply find too many substantive differences between the House and Senate proposal to see how a conference committee could reach consensus that would then be acceptable to each chamber. Months of negotiation, deals, and concessions in each chamber have resulted in legislation that would be acceptable to the barest majority needed to pass a bill in each house of Congress. The conference committee negotiations would necessarily unravel those deals and the fragile coalitions they created within each body. So the House has introduced a bill that currently lacks the 218 votes it needs to pass the bill, the next couple of weeks will be dedicated to finding those votes. In the Senate, Harry Reid is preparing to introduce legislation that is at least 5 votes shy of the 60 votes it needs. The next month (at least) will be spent trying to find those 60 votes. But even if the House and Senate clear the considerable hurdles that remain within their own chambers the far greater, and perhaps insurmountable, challenge will be reconciling the two bills. But the differences between the House and Senate on key provisions – the public option, mandates, and taxes – are considerable and represent deep philosophical and political differences that may prove impossible mediate.

Many expect that once the House and Senate have passed their respective bills President Obama will wade into the negotiations and hammer out a deal – those expectations may not be realistic. Progressive Democrats in the House and the Senate see this as a limited window of opportunity to enact substantive reform and have expressed little willingness to compromise. They know that whatever passes will be policy for years if not decades; after all, it took 15 years just to put health reform back on the agenda after the Clinton failure in 1994. But progressives lack the votes to pass anything without the votes of moderate Democrats, and they are far less willing to embrace substantive change.

(Of course, if I'm wrong I reserve the right to delete this post and pretend that I never wrote it...)

Election Preview for NJ, VA, and NY-23 at the PoliProf Blog

Last week I offered my assessment of the key 2009 elections one week out, I return as promised to offer predictions for tomorrow. A full write-up is available via the PoliProf

In short, I see a tremendous night for Republicans with wins in VA, NJ and NY-23. Democrats will argue that Virginia and New Jersey were decided based on state issues and have nothing to do with the President or his agenda. In NY-23 Democrats will argue that it shows that the GOP has no place for moderate or independent voices.

If there is a GOP sweep tomorrow expect this to seriously undermine key legislative initiatives such as health reform and cap and trade as moderate Democrats become increasingly concerned about 2010.

Beyond the Shouts: A Discussion of Health Reform in America

Everyone - from Congress to drug and insurance companies to providers and patients - has an opinion on health care reform. On September 28, 2009 St. Mary's College of Maryland brought together a panel of policy experts to offer their take on the heated debate and answer community questions about this complicated issue.

Participants in the panel included health care financing expert Greg Scandlen, pediatrician Margaret Flowers, and Karen Davenport, director of the Center for American Progress. Todd Eberly, Assistant Professor of Political Science and Coordinator of Public Policy Studies served as moderator.

Watch the forum here (please note that the volume is quite low):

Preview of the Virginia and New Jersey Elections

I have a preview of the high profile races in New Jersey and Virgina over at the PoliProf Blog. Back in early September I urged you to watch the off year elections in VA and NJ very closely, arguing that two GOP victories would indicate a high level of GOP intensity, Independent willingness to vote GOP, and, most deadly, Democratic apathy. Today marks the one week countdown to Election Day 2009 and I think that it is a good time to revisit the states.

The Need for Real Health Care Reform

A few weeks ago on the PoliProf Blog I cited a study by the McKinsey Global Institute (MGI) which found that the U.S. spends about 31% more per year on health care than would be expected based or our wealth, cost of living, and health. In a $2.5 trillion health care economy that translates into $775 billion in excess spending. Why do we over spend? We have higher administrative costs owing to the fragmentation in our system, but mostly the problem is the manner in which we pay for services. Since every patient and procedure is a source of revenue providers over-provide. Because our insurance frequently has no limit on the utilization of services, we over-consume. My argument then was that only system-wide reform could realize the substantial savings implied by the study.

The findings from the MGI study have just been confirmed by a new study conducted by Thomson Reuters. That study found that the American health care system wastes an estimated $700 billion a year, roughly one-third of the nation's healthcare bill. Among the key findings:

• Unnecessary care such as the overuse of antibiotics and lab tests to protect against malpractice exposure makes up 37 percent of healthcare waste or $200 to $300 billion a year.
• Fraud makes up 22 percent of healthcare waste, or up to $200 billion a year in fraudulent Medicare claims, kickbacks for referrals for unnecessary services and other scams.
• Administrative inefficiency and redundant paperwork account for 18 percent of healthcare waste.

According to a Reuters news account of the study "All this could help explain why Americans spend more per capita and the highest percentage of GDP on healthcare than any other OECD country, yet has an unhealthier population with more diabetes, obesity and heart disease and higher rates of neonatal deaths than other developed nations."

The Reuters story concludes with this "Democratic Senator Charles Schumer said on Sunday that Senate Democratic leaders are close to securing enough votes to pass legislation to start reform of the country's $2.5 trillion healthcare system."

The implication from that final line about Schumer and Democratic leaders being close to a deal on reform is that the reform may actually address the problems highlighted in the Thomson Reuters study - unfortunately, that is simply not the case. The current reform proposals being considered in the House and the Senate will not solve the systemic problems in the American health care system - in fact they will likely make the problems worse. The current reform proposals maintain our fragmented system and will even add to the fragmentation. The expansion of Medicaid and the creation of a public insurance option will only add to the plethora of insurance providers with which doctors and hospitals must contend. The reforms will do nothing to address the care-linkage deficiencies that result in the poor management of patients with chronic conditions (asthma, diabetes, heart disease) who consume 70% of our health care dollars. The reforms will not change the fact that our fee for service system makes every patient and every procedure a source of revenue - and therefore encourages overuse. The reforms will not alter our malpractice policies and the defensive medicine that results. Rather the proposed reforms will extend coverage to about 30 million Americans (a good thing), but it will accomplish this by dropping them into an inefficient, expensive, and broken system - the simple result will be even greater costs (a very bad thing).

In his recent book The Healing of America, T.R. Reid writes "Any proposal for reform that continues to rely on our fragmented structure of overlapping and often conflicting payment systems... will not reduce the cost or the complexity of American health care. Any proposal that sticks with our current dependence on for profit health insurers... will not be sustainable." Unfortunately our elected leaders have spent the past few months hammering out deals that will do those very things. While our press and our politics have been obsessed with whether or not reform would have a public health insurance option the real question should have been "will these reforms actually improve the American health care system?" Perhaps no one wanted to ask the question because the answer is so clearly "No."

President Obama has said repeatedly that he would like to be the last president to take on the challenge of health care reform... if he signs into law any reforms similar to the legislation being debated in the House and Senate he will fall well short of that goal.

Mo' voting, mo' problems?

The news yesterday that Afghan President Hamid Karzai has accepted the findings of the Electoral Complaint Commission (ECC) and hold a run-off election between himself and Dr. Abdullah Abdullah on November 7 was greeted positively in many corners. By all accounts, Karzai received the “Johnson treatment” from a host of Western politicians, including John Kerry, Hillary Clinton, and Gordon Brown. So, a run-off is good for Afghanistan, and by extension the United States and its allies, right?

There appear to be four possible outcomes to this decision. The best-case scenario for the United States is Karzai winning the run-off in a clean election that increases his legitimacy and allows the U.S. to continue to prosecute the war in Afghanistan with an ally or at least known commodity. The second best outcome is Abdullah winning a clean election, which would give him legitimacy, but offers a more uncertain outlook for U.S.-Afghan cooperation in fighting insurgents. Those are the two good outcomes, now we get the two far less desirable results. First, Karzai could win another election marred by fraud, leaving him in power as a weak, illegitimate leader at a time the U.S. needs a strong partner to assist in its strategy change under General McChrystal. Finally, in the worst-case scenario, Abdullah wins a tainted election and the U.S. stands at square minus-one. You could debate my rank ordering here, perhaps arguing that Abdullah is not a bad option for the U.S., but clearly the bright line exists between a free and fair election and one that is tainted.

The key probability for U.S. policymakers is the likelihood that the Afghans’ second try at an election will come off better than the first. There are a number of reasons to doubt this will be the case. First, the Afghans will have to scramble to prepare the country to vote in just over two weeks, and hope that the weather cooperates. Of course, considering turnout in round one was merely 30%, wintry conditions are only likely to keep more voters away from the polls. So, the first problem facing the second election is that low voter turnout might sabotage even a free and fair outcome.

The second problem is that telling Karzai, “This time, don’t cheat!” may not have much of an impact. Despite losing one million votes, Karzai still held a commanding lead over Abdullah. This raises the question, if Karzai believed he could win fairly, why would he organize fraud on such a massive scale? The answer is that, like many things in Afghanistan, Karzai may not have complete control, even over his own supporters who stuffed ballot boxes because they believed it would help their candidate. Fraud committed out of loyalty or to curry favor is likely to turn up in the second round, even if Karzai does not orchestrate it. Of course, it may be that all the fraud committed in the first round was sanctioned and organized by Karzai, but if that is the case, we might consider whether he is a good ally.

The final problem involves the images from the press conference yesterday where Karzai announced the run-off election. Succumbing to outside pressure is unlikely to increase Karzai’s bona fides as a nationalist. Even if he wins the election, Karzai may feel the need to exert his independence after this experience or he may be viewed by an increasingly large swath of the population as little more a Western puppet.

The take away point from all of this is that the outcome of a second election is highly uncertain and may be just as bad, or worse, than where we stand today. We are now far beyond Colin Powell’s “Pottery Barn Theory of International Relations” that we now have to “buy” Afghanistan because we broke it. Instead, the situation the U.S. finds itself in is more akin to working at the corporate offices and dealing with a difficult local manager. You have a certain vision for how things should be handled, but the manager has his own interests that may occasionally clash with yours or bring embarrassment on the company (country). Yes, this is the “David Wallace Theory of International Relations,” and it is much trickier than repairing overpriced dinnerware.

Deciphering Public Opinion on Health Care Reform

As Harry Reid (D-NV), Chris Dodd (D-CT), Max Baucus (D-MT), Rahm Emanuel, and Olympia Snowe (R-ME) continue to hammer out the Health Reform compromise between the Senate's HELP and Finance Committees there is a picture emerging with regard to public opinion toward health reform – and at first glance it makes little sense. The most recent data from Pollster.Com (see chart below) show that public support has begun to drop (after a mini-rally last week) and opposition is on the rise. A recent ABC News survey found that 48% opposed “the proposed changes to the health care system being developed by Congress and the Obama administration,” while 45% supported such changes. A Fox News survey found that 54% opposed “the health care reform legislation being considered right now,” and only 34% supported it. According to Rasmussen Reports 54% opposed “the health care reform plan proposed by President Obama and the congressional Democrats,” and 42% supported.

Taken together these polls suggest considerable opposition – but beyond these topline questions the picture becomes murkier. When ABC News asked “Would you support or oppose having the government create a new health insurance plan to compete with private health insurance plans” an overwhelming 57% indicated support – odd given that such a proposal is being considered as part of the changes being developed by Congress – the same changes that only 42% of respondents supported. When Fox News asked whether respondents would prefer “the current health care system or the health care plan proposed by the Democrats in Congress” the current system was favored by a 51% to 34% margin. The Rasmussen survey found that a majority of respondents believed that health care costs would increase and quality decrease if the current reforms were enacted.

So what can we make of this? There appears to be clear opposition to the health reform plans in general, support for maintaining the current system, a lack of faith in the ability of the proposed reforms to control costs or maintain quality, but also clear support for the creation of a public option. I see two possible explanations – one being that many Americans don’t know what the “public option” is and therefore their response to questions regarding support or opposition must be taken with a grain of salt. A recent post by Mark Blumenthal at Pollster.Com gives credence to the theory that the public does not understand the term. As he points out, a recent PEW study found that 56% of the public correctly linked the term “public option” to health, meaning that 44% of the populace does not recognize the term. He also points to a randomized internet survey where only 37% of the adult population could correctly identify the public option when presented with three choices (by random chance you would get 33%). So perhaps the public simply does not get it. There is one other possibility that gives the public a bit more credit. When Fox News asked respondents whether they supported reforming “the entire health care system” or reforms to provide “health insurance to those who don't have it,” covering the uninsured was preferred by a 50% to 27% margin. With that answer, current public opinion makes much more sense.

The current proposals in Congress would represent system-wide changes, though largely incremental in nature, they are more akin to the “Comprehensive Incrementalism” defined by the Washington Post's Ezra Klein. It would appear that most Americans are opposed to the proposed comprehensive incrementalism, but support efforts to cover the uninsured – such as a public, or government-sponsored health insurance option. So when ABC News asked whether respondents would support “a plan that includes some form of government sponsored health insurance for people who can't get affordable private insurance, but is approved without support from Republicans in Congress; or a plan that is approved with support from Republicans in Congress, but does not include any form of government-sponsored health insurance for people who can't get affordable private insurance?” it should not be surprising that “government sponsored health insurance for people who can't get affordable private insurance” was preferred over bipartisanship by a 51% to 37% margin. This is roughly the margin that preferred covering the uninsured over system-wide reform in the Fox poll. By no means does it suggest that the public would prefer Democrats to “go it alone” on overall health care reform, nor does it suggest public support for current proposals would be higher if those proposals contained a public option. It does tell us that Democrats are correct when they say that the public supports a public option, and Republicans are correct when they say that the public opposes the health reform proposals currently being considered in Congress.

Let it Snowe, Let it Snowe, Let it Snowe...

On Tuesday, Olympia Snowe (R-ME) became the only Republican member of the Senate Finance Committee to vote in favor of the so-called “Baucus Bill” for health reform. Though threatened with repercussions by Republican leadership Snowe simply stated that “when history calls, history calls.” Snowe also prefaced her vote by saying that her vote today did not forecast what her vote would be when final legislation came to the floor of the Senate. With that one vote, Snowe has catapulted herself in to the final negotiations over health reform legislation. In fact, Ezra Klein reports today that Snowe now has a seat at the table along with Senate HELP chairman Chris Dodd (D-CT), Finance chairman Max Baucus (D-MT), and White House representatives Rahm Emanuel and Nancy-Ann Min Deparle. This has incensed liberal Democrats in the House and Senate. They are angry that in an effort to create the veneer of bipartisanship one GOP senator has been granted tremendous influence on the final product. Make no mistake, Snowe’s involvement will influence the final product, it will likely ensure that the Senate bill contains no strong public option (if anything), and it will likely mean that the weakened individual mandates (see prior post) will remain. One thing is certain, with that one "Yes" vote, Snowe demonstrated that she is a very shrewd politician.

Shooting from the AHIP... or 1993 All Over Again?

Last week on the PoliProf Blog I warned that the decison by the Senate Finance committee to water down the individual mandates in the health reform legislation risked raising the ire of the insurance industry. Consider their ire raised... After initially signaling support for reform efforts the industry's chief lobbyist issued a report today that projects that the legislation, as currently proposed, would add $1,700 a year to the cost of family coverage in 2013. When asked, Karen Ignagni, president of America's Health Insurance Plans (AHIP), would not rule out attack ads on TV featuring the study.

In 1993, AHIP was responsible for the highly effective Harry and Louise ads which featured a middle-aged, middle-class couple, expressing deep concern over the bureaucratic nature of Clinton's proposed reform. One can only assume that AHIP is dangling a similar threat now to extract as many concessions as possible at this make or break point. Democrats and the White House have reacted harshly to this apparent broadside from AHIP, but they had to know that it was coming after weakening the individual mandate. As it stands now, insurers will be required to cover high risk folks with pre-existing conditions, but will not get to bring all of those young, healthy folks into the risk pool because the mandates have been so weakened – suddenly reform looks like a bad deal for the insurance industry - and they are expressing their displeasure. Given the power of the insurance industry, Democrats should be worried.

All Eyes on the Prize

The quite surprising news out of Oslo today that President Obama will receive the Nobel Peace prize is likely to raise eyebrows even among the President’s supporters. The debate in the United States will likely provide a rehash of last year’s election campaign, with the President’s critics arguing that his thin resume does not justify the honor. However, the real question surrounding the award is whether Obama is a Willy Brandt or a Woodrow Wilson, two prominent leaders who received the award at different stages of their political careers. The Nobel committee clearly hopes that Obama’s award signals the potential of things to come, just as Brandt’s Ostpolitik had not yet born fruit when he received the prize in 1971. For Wilson, the Nobel award is the tale of promise unfulfilled, as his efforts to build an enduring peace following World War I failed when the Senate failed to ratify the Versailles Treaty and thereby beginning the slow death of the League of Nations. The general problem with the Peace prize is that unlike the Literature prize, winning the award does not appear to help your career. Since the award is normally given for past service – hence Jimmy Carter’s win in 2002 – it does not lend itself to furthering one’s goals. The exception to this might be when the award is given to lesser known human rights or environmental campaigners such as Jodi Williams or Wangari Maathai, who can parley the award into greater recognition for their causes. The larger point is that despite the prestige of winning the Nobel, Obama will be hard pressed to use it to support his foreign policy goals. The large number of Democratic winners over the past decade (3) is likely to lead Republicans to view the award as a left-wing coronation rather than a distinguished prize. On the other hand, the award will raise Obama’s esteem in the international community where he already enjoys broad popular support. However, the award occurs in the same week as the release of a report by an American Political Science Association task force investigating anti-Americanism. The report argues that while Obama does enjoy widespread popularity around the world and is partially responsible for the improved views of the U.S., there remains widespread discontent with many U.S. foreign policies. The awarding of the Peace prize could contribute to the opposite effect of what occurred during the Bush presidency, with Obama enjoying more positive ratings than the country as a whole. In the end, as with Woodrow Wilson, the question remains as to whether the goals that Obama has set for U.S. foreign policy will be matched by results.

Health Reform's Comprehensive Incrementalism

Ezra Klein offers a pretty fair assessment of the Senate Finance Committee's health reform legislation post Congressional Budget Office analysis "this bill will change the insurance situation for 37 million legal residents, 29 million of whom would otherwise be uninsured. That's a big step in the right direction. But most people will never notice it."
Klein coins a great new term "comprehensive incrementalism" and correctly notes that the bill would produce some good change, but is by no means represents system-wide reform. So even if it becomes law, Barack Obama will not be the last president to take on health reform.
There is a larger political point though, according to the CBO the Senate Finance bill would cover 94% of the population and with cost offsets and new revenue would reduce the deficit - the bill is paid for. So Republicans have a choice to make; will they simply be the party of "No" or will they follow the advice of former Majority Leader and presidential candidate Bob Dole and support the reform effort? The bill offers the promise of expanding coverage while maintaining the basic structure of our current system (unfortunately), so what is there for the GOP to oppose?

Lessons in disastrous analogies

There has been some buzz this week over Gordon M. Goldstein's Lessons in Disaster, which documents key decision-making moments during the Vietnam War from McGeorge Bundy’s perspective. According to George Stephanopolous, the book has become a must-read for Obama administration officials. Of course, since this is a book about Vietnam, you can guess that the message administration officials are going to take away is unlikely to be that escalation is the answer to American problems in Afghanistan. Putting the debate about the correct path forward in Afghanistan aside for the moment, the selection of Goldstein’s book raises a larger question about how policymakers form their opinions on international issues. While Goldstein’s book is undoubtedly a fine history of the difficult decisions surrounding the Vietnam War, merely raising the specter of Vietnam means that the lessons likely to be set out before the spine is cracked. It seems unlikely that Vietnam will ever be invoked by a politician as a successful case of U.S. military operations.

The greater problem is how history is being used here. Obama is certainly not the first President to employ this tactic. George W. Bush read Hugh Thomas' The Spanish Civil War, which leads to the argument that if fascism were stopped in Spain, further horrors could have been avoided. If we simply treat history as a grab bag, from which we draw examples to affirm our pre-existing beliefs, the true value of history is lost. While on health care Obama assigned an article with social-scientific underpinnings (Atul Gawande’s “The Cost Conundrum”), on foreign policy issues there seem to be only a small number of examples from which we can draw lessons (Munich, Yalta, the Cuban Missile Crisis and Vietnam) and these tend to be very poor approximations to most modern problems faced by the United States. As Yuen Foong Khong has pointed out, such analogies tend to generate more heat than light: we read into them the message that we want to see.

Admittedly, finding good data on success against insurgencies is difficult, although the Enterline and Magagnoli dataset mentioned in an earlier post is a good start. Perhaps the fact that Presidents repeatedly select histories for guidance on foreign policy is more a comment on the shortcomings of international relations scholarship: unreadable prose, limited policy applicability, and a focus on theoretical debates. Still, I’ll dream of the day that I see the White House book club is reading an IR scholar’s book. Then I can criticize them for reading the wrong scholar…

The Economic Case for Single-Payer Health Care Reform

I make the case for single-payer health reform over at the PoliProf Blog:
"The only way that we can bring health care spending under control, and therefore be able to provide coverage to everyone, is if we move beyond our aversion to government intervention. Only government can effectively allocate our health care resources in a manner the responds to need rather than wealth. Only government can establish an annual health care budget and ensure that facilities and providers abide by the annual limits. Only government can effect our transition from a system driven by the perverse incentive to deliver care as a means to generate revenue to a system based on the proper management of care in order to conserve resources. The logical approach would be to restructure Medicare and make it universal. And it must be universal. The only way to get the public on board, and to accept the change, is to have us all in the same system, all guaranteed the same level of care, all sharing the same resources. This is what other nations do, and what we must do."

There's a Public Option and Then There's a Public Option...

The Senate Finance Committee defeated two efforts to add a public option to Baucus authored health reform bill, but proponents have note ceded defeat. In fact, many are being heartened by recent statements from Harry Reid that “We are going to have a public option before this bill goes to the president's desk.”

What does this mean? Will Reid ensure that the public option is retained when the Senate Finance and Senate Health, Education, Labor, and Pension committee bills are merged? Does it mean that he will ensure that the public option survives the House/Senate conference process? Does it mean that he plans to use reconciliation to pass the bill and has sufficiently prepared for all of the challenges that would present?

Or does it mean that Reid is choosing his words wisely? Moments after his initial comments were made public his office offered a follow-up: “Sen. Reid believes that health insurance reform must include a mechanism to keep insurers honest, create competition and keep costs down… the public option is the best way to do that… we don't know exactly what that option will look like.”

I’d suggest that it won’t look like a federal public option, rather it is more likely to come in the form of the amendment drafted by Tom Carper (D-DE). Carper’s amendment would:

give states the authority to increase competition in health insurance markets by implementing one of the following mechanisms listed below. This would allow a state to offer a state public option; however, both the executive and state legislature would have to agree.

The state would have the option of implementing one of the following mechanisms:

1. Participate as grantees in the CO-OP program and apply for seed funding.

2. Open up that state’s employee benefits plan.

3. Create a state administered health insurance plan with the option of banding together with other states to create a regional insurance compact.

So states could participate in the co-ops created in the Baucus bill as a substitue for a national public option, open the state's insurance plans, or create a state based public option... This is hardly a significant change and arguably "allows" states to do things that they can already do.  So I would advise tempering any excitement over Reid’s comments.

Senate Finance Committee Rejects Public Option Amendments - So What Now?

Democrats on the Senate Finance Committee were prepared to offer three versions of the public option today (Sept. 2). Chuck Schumer (D-NY) was the sponsor of two of the alternatives - one he called the “level playing field” option. Under this plan providers would be able to negotiate reimbursement rates with the public insurer and voluntarily choose to participate in the program. This option would be required to be fully funded via premiums and even generate a reserve fund in case premiums proved to be to low. No tax dollars could be used to support it. Schumer's other amendment would have replaced the current bills plan to create insurance co-ops with the public option alread in the Senate Health, Education, Labor and Pensions (HELP) Committee's version of the bill. In that bill, the secretary of Health and Human Services would have the power to negotiate reimbursement rates. The final public option amendment was sponsored by Jay Rockefeller (D-WV), under his plan providers would be paid a rate no more than 5 percent above Medicare rates (Medicare pays less than private insurers).

Rockefeller's amendment was the first one on the block and it was defeated 15-8, with 5 Democrats joining all 10 Republicans to defeat it. The 5 Democrats were Committee Chairman Max Baucus (D-MT), Kent Conrad (D-N), Tom Carper (D-DE), Bill Nelson (D-FL)and Sen. Blanche Lincoln (D-AR). In the end, Schumer introduced his level playing field option and it was defeated 13-10 - with Baucus, Conrad, and Lincoln voting "no."

There remain three opportunities for the public option to re-emerge. 1) Once the Finance Committee reports its version of the Health Reform bill, Senate Majority Leader will merge it with the Senate HELP Committee's version - Reid could simply keep the HELP version's public option and drop Finance's co-op alternative. 2) On the Senate floor the bill could be amended to include a public option (that would require 60 votes to overcome a certain GOP filibuster). 3) If the House passes a public option and the Senate does not, the House version could be adopted in the Conference to reconcile differences between the two bills.

So three chances remain, but today's votes in Senate Finance make it clear that the public option cannot pass the Senate under normal rules of process where 60 votes are needed. The only way to pass a public option is via reconciliation - an option created in 1974 solely for resolving issues related to the deficit. NBC's First Read offers a great synopsis of the reconciliation and why it is an option of last resort - essentially, opponents could move to strike every provision in the bill not directly related to taxing and spending - the resultant bill would look like a puzzle missing half of its pieces. All of those missing pieces would be assembled into a new bill that could not rely on reconciliation and would face the 60 vote barrier. In an interesting historical side note, President Clinton and Democratic leaders considered using reconciliation to pass the Health Security Act in 1994 - but Robert Byrd (D-WV) refused, stating that such an important issued deserved a full and public debate.

The public option is not dead... but it may want to consult one of those death panels for some end of life counseling.

Evidence? We don't need no stinking evidence!

The latest meme on the Iranian nuclear program is that Iran's admission of the centrifuge facility near Qum is but the tip of the iceberg. The Times has a nice "man bites dog" piece on U.S. intelligence taking a cautious line on the Iranian nuclear program after the Iraq debacle. The story argues that European intelligence agencies are much more hawkish on the Iranian program than their American counterparts (although, this is not, as the Times reports, a mirror image of the Iraq debate). The even handedness of the Times story falls apart at the conclusion when they quote Graham Allison: “How likely is it that the Qum facility is all there is? Zero. A prudent manager of a serious program would certainly have a number of sites.” Of course, this comes from the same nuke alarmist who bet Nicholas Kristof that terrorists would explode a nuclear bomb by 2014. Over at Foreign Policy there is similar hand-wringing over the implications of the Qum facility, although the article focuses on the fact that President Ahmadinejad's statements following the disclosure of the facility are at odds with IAEA rules (insert mock shock here!). What unites both the ominous Allison quote and the equally ominous FP piece is a general aversion to providing actual evidence for their contentions. For Allison the rationale is that any descent nuclear program should have more sites. In the FP article the rationale seems to be that Iran does not follow the rules and thus there must be other facilities. Instead of relying on evidence for their claims, these authors can instead rely on general distrust of Iranian intentions to support their arguments. It is too easy for those following Iran to simply take every piece of new evidence about the nuclear program as further "proof" that Iran is trying to develop nuclear weapons. The real story is the cautiousness of U.S. intelligence on Iran, despite the cries of the nuclear alarmists. We will have to see how long evidence-based intelligence wins out over doomsday theories.

Big Day for Health Reform and the "Public Option"

Today will be a decisive day in the health reform battle. Today, the Senate Finance committee will decide whether or not to amend the Baucus bill to add a public option. The Committees 13 Democrats and 10 Republicans will consider no fewer than 4 "public option" options and at this point, no one knows what will happen. Most counts find 9 Democrats in favor of a public option and no Republicans. Max Baucus, not one of the 9, has said he supports a public option but does not believe that it can pass in the Senate (assuming a 60 vote threshold).
Blanche Lincoln, Blue Dog Democrat from Arkansas, is an unknown quantity. She is slowly inching toward the endangered senator list - like several Democrats up for re-election in 2010 her seat was once deemed to be safe, until the health care debate changed the 2010 electoral calculus. There is also the issue of Olympia Snowe and her support of a state-based public option trigger - a trigger that would only be pulled if private insurance reforms fail. At least 2 Democrats support Snowe's alternative. If the Senate Finance Committee adds the public option, in form other than Snowe's trigger, then all bets are off with regard to Democrats using reconciliation to pass the bill - they will use reconciliation. Then the battle will shift to the House where leaders will put heavy pressure on select Blue Dogs just to get the simple majority needed there. Today is one of those rare, high drama days in American politics and a day worth closely following.


The Finance committee meeting will begin at 10 AM and will likely be broadcast on C-SPAN.

The whole equation on Afghanistan

Following the release of General McChrystal’s report on the state of the war in Afghanistan, debates have broken out about the best path forward for the U.S. in a country that has not been kind to foreign powers. The struggle within the administration over the proper path forward has been well documented, with Vice President Biden seeking to draw down U.S. force levels while Secretary of State Clinton and others have pushed for a more significant commitment. President Obama, who made success in Afghanistan a cornerstone of his foreign policy as a presidential candidate, now appears less sure about increased troop commitments. At the center of this debate are two interrelated questions: can the U.S. achieve success in Afghanistan and if so, at what cost is it willing to do so?

The image of what a successful outcome in Afghanistan looks like is far from clear, and the notion that Iraq is viewed as a positive model is not particularly encouraging. But even relatively minimalist expectations for stability in Afghanistan are undercut by the large number of hurdles facing Karzai’s regime (poverty, lack of education, well-organized rebels, an unstable neighbor, mountainous terrain, etc.). In Sunday’s New York Times, David Brooks, while acknowledging choosing the right path in Afghanistan is tricky, argues “American forces have become quite good at counterinsurgency. They have a battle-tested strategy, experienced troops and a superb new leadership team.” He then goes on to approvingly site work by international relations scholars that finds counterinsurgency campaigns centered on “hearts and minds” strategies succeed 70% of the time. These numbers should give us confidence in a successful outcome, right?

Not surprisingly, as in much social science research, one must read the fine print (or at least look at all the tables). As Alex Downes points out, perhaps the more important finding for the U.S. in Afghanistan is the fact that no country that switched to fighting a “hearts and minds” campaign after eight years (the length of time the U.S. has been in Afghanistan) has ever defeated an insurgency. Of course, this does not mean that the United States is destined to fail in Afghanistan, but it does show that we need to be realistic about the odds of success, the length of time involved, and the costs.

It would be nice if we could bring findings from international relations to bear on the Afghan conflict, but the Enterline and Magagnoli dataset Brooks favorably cites contains only 66 conflicts (33 since 1946) and a significant number of these are anti-colonial wars of independence. The relatively small number of cases combined with the heterogeneity of the conflicts makes extrapolating useful information difficult. Perhaps most noteworthy is that the authors find the mean duration of a conflict after switching to a "hearts and minds" strategy is over eight years. A recent New York Times poll found that only 44% of respondents were only willing to remain in Afghanistan for more than two years.

Over the coming weeks, policymakers, commentators, and even a few academics will debate the future role of the United States in Afghanistan. While this debate will focus on the costs and benefits of an increased or a decreased commitment by the U.S. to the war, it is likely to be an elaborate sideshow. Overshadowed by this debate are two well established facts in international relations: state building is costly and time consuming and support for wars declines over time. Neither of these findings bodes well for the Obama administration putting more troops and resources into Afghanistan. At the end of the day, President Obama will have to weigh the very risky proposition that increasing troop levels will improve the situation in Afghanistan against the more predicable results for a decreased commitment. Setting the stage for an exit in Afghanistan will lead President Obama’s hawkish critics to jump all over him, but such problems are predicable and manageable. That option may be more appealing than the highly unpredictable and high stakes decision to increase troop levels.