Let it be said, at 1:15 a.m. ET, that Democratic Party discipline held, that Republicans failed to kill health care reform, that the president now has a strong chance to sign into law historic, expensive and far-reaching health care reform legislation before his first official State of the Union address in a month from now. The bruising year-long battle has left the Democratic Party divided, has expended virtually all of the president's political capital, and the legislation's fidelity to the goals sketched by candidate Obama are questionable.
(1) Harry Reid's strategy worked. It worked to his satisfaction, not to the satisfaction of activists within his own party, and he could very well be drummed out of office because Democrats aren't enthusiastic about his leadership. He will have sacrificed his power for the sake of a bill -- for the sake of Obama's presidency. For those who think that the White House is somehow angry at Harry Reid for failing to herd his cats with fewer scratches to show for it, they're in for a surprise: Reid promised the White House he'd get them 60 votes for a good bill, and he got them 60 votes.
(2) Democrats decided that interests, rather than values, were the governing principles in the later stages of the health care debate. That means they're looking at the stuff that people will be getting: millions of people will now be able to afford insurance; small businesses will find it easier to deal with employees who have chronic illnesses; poor communities will receive an infusion of cash for community health centers; there are roughly $100 billion per year in subsidies for people to purchase insurance. Values? Most of the means through which these interests are advanced are through the profit-incentive vehicles of the private insurers who've fought most of the changes, who have every incentive to fight the cost containment mechanisms that the government insists upon (remember: they tried, through HMOs, in the 1990s, to reduce health care costs and were excoriated for it). The values preserved in this health care bill are corrupt, from the standpoint of activists, because liberal ends were arrived at using fundamentally suspect means. Containing costs is going to be a huge challenge, and the fight here has just begun.
(3) Both sides bemoan the lack of a bipartisan consensus on health care reform, but keep in mind that politics has changed over the past 20 years: it is virtually impossible, given the way interests have aggregated themselves in Congress, to build bipartisan coalitions on issues like these. And, truth be told, when President Obama laid down the marker that, rather than blowing up the system, he wanted to preserve and expand upon the current system, he made a significant concession to Republicans. When his chief of staff, Rahm Emanuel, insisted on bringing in the hospital, insurance and pharma lobbies, the administration effectively incorporated ideas that were anathema to its party. The White House worked for months with a variety of Republican senators, often successfully persuading House and Senate Democrats to incorporate their concerns. In the end, that the bill wound up being Democratically-inflected should not come as a surprise -- there has to be a large government role in health care expansion -- nor should it be seen as a knock against the White House's efforts to open the process to non-traditionally liberal viewpoints. The anger at Emanuel right now -- the idea that HIS compromises are what killed the public option or Medicare buy-in, the anti-trust exemption repeal for insurers, significant reform of the pharmaceutical industry -- is testimony to the bipartisan nature of the bill. That Republicans could not bring themselves to support it -- some of them wanted specific things and didn't get them so they dropped out; others succumbed to in-group pressure -- should not reflect poorly on the White House.
(4) The bill that Obama signs will be "better" from the standpoint of liberal activists than the bill that the Senate is going to pass. It will contain more subsidies...probably some version of a trigger for some sort of insurance competitive mechanism...a reinstatement of mandatory cost controls for hospitals...and even tighter restrictions on insurers.
(5) What's the short and long term political implications of this? Since the debate itself has dragged down the government, one can safely assume that the public opinion will stabilize. Beyond that, whether implementation problems crop up before 2010 or 2012, whether the bill remains unpopular (when it's associated with congressional Democrats), whether the bill remains popular (when people are given information about what it actually contains) -- is not knowable right now.
(6) Obama's next big political fight will be about the budget, which he'll unveil in February, and which will be fairly austere (zero growth?), and which will trigger (perhaps) even more of a revolt from liberal activists in his party. Does Obama have the political capital to pass his budget with his Democratic Congress? Probably. Will liberals be enthused? Not likely.
(7) Assuming the bill does not have a catastrophic impact on the system, it will probably be popular in the long-run, even though it is not a strict entitlement -- people are going to have to pay for it. Republicans are probably correct in assuming that Democrats are going to add, incrementally, to the foundation they've laid. There will be a balance of incentives on individuals to make health care decisions more carefully and more pressure on providers and insurers to make them more judiciously. I'd expect the balance to shift more toward the providers and insurers and away from patients. We're not going to end up with a single-payer system, but we are going to end up with a system that, more and more, is predicated on insurers and providers being held accountable for their standard of care.