Just a few months ago, members of Congress took turns wagging their fingers at CEOs of the automakers for not making tough choices--not shedding "legacy costs," not making products consumers wanted, not cutting bloated bureaucracies. Detroit had become self-referential, unable to compete because it was unwilling to deal with its internal constituents.
Now Washington faces a series of domestic crises that will shape the health of our society for decades--unaffordable healthcare, balkanized financial regulation, and a mind-boggling deficit, to name three. But Washington will likely fail--indeed, may even make the problems worse--unless it deals with its own "legacy costs" and bloated bureaucracies, which currently make it impossible to achieve new focus and efficiencies.
Detroit is Google compared to Washington. Year after year, Congress makes laws but almost never repeals them. Washington is like a huge monument to legacy costs. Laws from the Depression will send tens of billions in unnecessary subsidies this year to farmers, organized labor and other groups thought to be in need--80 years ago. Bloat is also notorious--it's nearly impossible to fire anyone under civil service laws, so layers of middle management have grown exponentially. Professor Paul Light found 32 levels in some agencies (compared to 5 levels in most well-run enterprises).
All this accumulated law--about 300,000 pages of federal statutes and regulations--operates as a form of central planning. It bogs people down in bureaucracy. In healthcare, the labyrinthian requirements of Medicare, Medicaid, HIPAA, plus the equally dense, and often conflicting requirements of 50 states, plus the insurance company red tape, make it impossible for people to deliver care efficiently. Add to that bureaucratic nightmare the ever-present fear of being hauled into court whenever a sick person gets sicker, and you have a system that looks like it was designed for frustration and waste. (See here for principles needed to climb out of this rut.)
The inertial forces that make it hard to achieve change in Washington, in the best of circumstances, become a kind of invincible fortress when reinforced by thousands upon thousands of pages of binding law. Each of those provisions is zealously guarded by special interest groups, and changing any word of a statute requires the votes of 218 members of the House and (generally) 60 senators.
Faced with legions of special interests, Congress is trying to fix healthcare by piling new requirements on top of the old ones. But this won't address the underlying problems of efficiency, any more than it could in Detroit. To restore focus and efficiency, Congress must first clean out what's there--not to eliminate the goals of existing regulation but to put them in a coherent framework that real people can understand and internalize.
Dealing with the sclerosis of accumulated regulation, however, is not something our leaders have any experience with. Most of the historic legal reforms of the past century were written on a new slate. The Progressives at the turn of the 19th century imposed worker safety and food safety laws to fill the regulatory void of laissez-faire. Roosevelt's New Deal provided social safety nets where there were none, and job programs in agencies that didn't exist before. The civil rights movement led to laws against discrimination where there were none.