Why the White House Probably Doesn’t Want a Public Option
By: Scarecrow Tuesday October 20, 2009 9:26 pm
F I R E D O G L A K E D O T C O M

The question many health reform advocates have been asking about the public option debate is “what’s the problem”??? Why isn’t the President demanding it, pushing it, selling it? Well, maybe he doesn’t want it.
Why, given strong Congressional majorities in favor of a public option, continuing strong polling support across the country, and overwhelming support from Democratic voters, is Harry Reid treating the matter as though it were a close call?

To be sure, getting 60 votes for cloture is a challenge, but that is not the same as needing 60 votes for a public option, no matter how many times the media equates the two. Only 5 or 6 Senate Democrats are even opposed in concept. Yet not one of these holdouts has publically declared that he/she would join a filibuster to keep a public option from getting a simple majority-rule vote. Sen. Harkin correctly asks, why should these five be empowered to force over fifty to give in?

Everyone also knows that if Harry Reid puts a viable public option in the Senate bill, there aren’t 60 votes to remove it. So why is Harry Reid behaving as though Democrats had something to fear if they demand party loyalty on a cloture vote and then push through a measure that has more voter support than any health reform measure they’ve proposed outside banning insurers from denying coverage to the sick?

Night after night, we are reminded (thanks to Nancy Pelosi prodding CBO) that a strong public option will save tens of billions, give consumers a choice in an industry that is dangerously concentrated and lacking in competition, and put pressure on insurers to lower premiums in the face of their promises/threats to raise them. Everyone now realizes a strong public plan could provide a credible, government-guaranteed alternative even if the private insurers succeed in evading new government regulations banning their most outrageous practices — practices whose evil effects we see repeated on a daily basis. So what’s the problem?

The Beltway conventional wisdom, steeped in cynicism, is that the White House is being disingenuous when it repeatedly says the President supports a public option. WH officials claim Obama believes it is “the best way” to provide an affordable choice and reduce costs. But then why is he not working to get it adopted in the Senate, and explicitly directing his OFA troops to help that effort? Why has he ducked every opportunity to make even the logical argument that the burden is on detractors to show there’s a better measure? No one has seriously attempted such a case.

In House and Senate leadership efforts to merge their respective bills, it’s curious that no one has noticed that House Speaker Pelosi does not seem to need the White House to tell her how to merge three House bills while improving them. But apparently, Harry Reid is not capable — or cannot be trusted — to merge two Senate bills without having Rahm Emanuel, Peter Orszag and Kathleen Sebelius present every meeting.

There’s nothing wrong with the Senate consulting with the White House about what they’re willing to push and pay for. But the White House told reporters that all the key decisions would be made by Harry Reid. So why are these senior White House people, including the man who sees himself as the center of the universe, there if not to tell Harry Reid what he can and cannot decide?

It is hard to avoid the fear that this White House has now become a principal obstacle to getting meaningful health care reform. It claims it wants major cost reductions in Medicare, via a semi-autonomous cost-cutting commission. But the White House has already bargained away the savings it can achieve from most of the major providers: PhRMa ($80 billion), hospitals ($155 billion) so they can give it back to the doctors (for whom AMA is demanding $240+ billion more over ten years in relief from automatic Medicare reductions).

Why should we not also believe that the White House has a deal to shield insurers from competition by preventing the creation of a public option in exchange for the insurers agreeing to reforms on guaranteed issue and limited community ratings (with the flexibility Baucus provided) and to support this framework with tv ads? (Read Ignagni’s WaPo op-ed today; while defending the PwC study, she says they made a deal, but Baucus broke it; she didn’t say the deal’s off.)

The White House isn’t taking up most of the chairs in Harry’s Reid’s meetings just to watch him make decisions on his own. They’re there to make sure Harry Reid doesn’t undo the White House deals and wander off the reservation.

This President has filled the White House with people who have no inclination to pose any major challenge to the economic power of America’s dominant financial industries (GM being an exception). We’ve already seen this in their dealings with Wall Street investment banks and their too-big-to-fail is too-big-to-challenge approach to financial regulation. We’re seeing it now with efforts to shield the major health and insurance industries from any fundamental challenge.

Sure, there are changes being offered, new regulations being proposed, and more people will be insured than before. But there is no framework being laid for a new structure for how health care is delivered and paid for in America. That is the pattern of this White House, and there is little basis to expect otherwise.

Watch the decisions Harry “makes” in coming days. My bet is they’ll shore up the underlying deals — they’ll make mandated insurance modestly more affordable and fix the mandates a bit, while protecting the insurers from a viable, functioning public option. The industry will still control a system in which consumers will be forced to buy their unreliable products with government subsidies.

And seeing this coming, Nancy Pelosi will push a more reform-minded House to fight back as hard as they can. The House now carries the hopes for even limited reform. Sadly, her opposition is not just the Senate’s 60 vote barrier; it’s in the White House.