Is Comprehensive Health Care Reform Dead?

There's a lot of sadness on liberal blogs these days.  What happened to Hope and Change?  Climate change is coming sometime next year, maybe.  Financial regulation also isn't coming anytime soon, and what's proposed is the minimum set of politically feasible propositions rather than a sweeping overhaul.  And health care?  What the @#%! is Congress doing messing around with expensive, incremental [expletive deleted]?  How can such a popular president be so powerless?

There are a lot of answers to this.  The first is to point out, as The Economist ably does, that the reports of the end of the honeymoon have been greatly exaggerated.

But two things are also clear:  the Democrats overestimated the boost they'd get from both the crisis and Obama's popularity.  And they dissipated a hell of a lot of the money and political capital they'd now like to spend on the stimulus and the GM bailout.  They got very carried away with visions of 1932.

But this is not 1932, and Obama is not FDR.  FDR came into office with 20+% unemployment and a banking crisis that was wiping out peoples' life savings every day.  FDR also came into office with a trivial national debt, and a Federal government that consumed less than 4% of GDP.  He had a lot of run room.

Maybe more importantly, he came into office without the kinds of institutional arrangements that made it politically difficult to pass his policies.  There are a lot of these, but some highlights:

• There was no institution like the CBO to model the impact of his programs, and implacably report that they were going to cost huge amounts of money
• There was no vast fraternity of tax lawyers to help blunt the revenue enhancements from new taxes
• Discipline in the Senate and the House was much stronger
• Corporate lobbying was relatively weak, and interest group lobbying was in its infancy
• There was no existing infrastructure of programs with constituents fighting change

What's happening now is precisely the kind of political gridlock I--and a lot of libertarians and conservatives--predict when it comes time to actually cut costs in healthcare.  Why can't we tax employer health benefits?  Liberal answer:  because Ben Nelson is a big fat jerk.  My answer:  because then the awesome health care package that Democrats want to run on in 2010 would come packaged with a non-awesome hefty decline in everyone's weekly paycheck.  The number of people who would get a benefit out of the program would be much smaller than the number of people who would pay a noticeable cost.

Jonathan Rauch's book, Government's End, is one of the best popular books on the political process I've ever read.  It outlines precisely this problem:  the longer your government has been around, the less room there is for changing the government.  For decades, there have been a lot of theories about how various politicians were going to overcome this glacial inertia.  Clinton thought he had an overwhelming mandate for health care reform.  The Contract with America folks thought they had an overwhelming mandate to shrink government.  The Bush team thought that 9/11 had created a permanent Republican majority.  What's astonishing, in retrospect, is how little any of them really changed.

Many Democrats thought this time was different, and I confess, so did I:  Obama was popular, the war was not, the financial crisis offered cover and rationale for sweeping change.  And maybe it still will be.  But part of the problem is that if all that stimulus money works, it will rob not only the funds, but the sense of crisis, he needs to make really substantive change in the face of a loss-averse electorate.