Obama's big speech

Once again, he rose to the occasion. My overall feeling: "This is the Obama who won the election. What a superb politician he is. Where has he been on this issue for the past six months?"

He set out to talk to the country over the heads of the politicians in front of him. About time: it is public opinion he needs to bring round if healthcare reform is to succeed. In this, the occasion both helped and hindered--helped, because it permitted a style of oratory that he does brilliantly, and which could seem false in a more modest, informal setting; hindered, on the other hand, because the audience kept interrupting, getting between Obama and the country, imposing itself on the event with its frequent, fatuous, pantomime ovations.

I thought it striking that the ovations ceased during a long, seemingly heartfelt, and very effective peroration: they stopped, it seemed to me, because the audience started listening. (Nancy Pelosi even stopped grinning.) Obama invoked Ted Kennedy as part of a renewed appeal for bipartisanship, a theme he is reluctant to abandon, and did it so cleverly that Republicans were folded in and obliged to respond.

He said that meeting the challenge of healthcare reform was a test of the nation's moral character--which, in my view, it is. I found his closing words genuinely affecting. My guess is that many other independents will feel the same way. (In this, an earlier moment of boorish heckling from one Republican also helped.) At last, Obama emphasised the "health security" benefits of reform for those who already have insurance: they will not lose it; their out-of-pocket expenses will be capped. This is at least as important as the benefits to the currently uninsured.

All in all, I think he made the case for reform about as well as it could be made.

But what difference is it going to make? I wrote down three questions before the speech. Did he take charge of the process? Did he explain what "the plan" actually is? Did he settle the row over the public option? He should have done all these things already. Tonight I thought he made some progress in each case, but without answering any of the questions definitively.

He talked about "the plan I'm announcing tonight"--seeming to assert his ownership, and at the same time declaring a new start for the process. Good. But there is still no detailed White House proposal, and the action now moves back to Congress. Obama's "plan", as he described it, was a recapitulation of bullet points from the proposals already in play. On substance, in other words, little was new.

One notable exception was the vague but nonetheless welcome promise to look at tort reform as an additional avenue of cost control. He put some stress on this as part of his outreach to Republicans, which was shrewd. Since this is something Republicans want, the offer makes it politically harder for the party to settle for its default mode of sullen unconstructive opposition. Curbs on medical malpractice litigation also happen to be good policy.

I mostly liked what Obama said about the public option too. He said he wants it and made the usual (less than convincing) case--it's all about strengthening competition--but then said this:

[Its] impact shouldn't be exaggerated - by the left, the right, or the media. It is only one part of my plan, and should not be used as a handy excuse for the usual Washington ideological battles. To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end - and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have.

For example, some have suggested that that the public option go into effect only in those markets where insurance companies are not providing affordable policies. Others propose a co-op or another non-profit entity to administer the plan. These are all constructive ideas worth exploring. But I will not back down on the basic principle that if Americans can't find affordable coverage, we will provide you with a choice.

This is a wise formulation and stakes out possible ground for compromise between progressives and conservatives within the Democratic party. Good stuff.

Unfortunately, though, the public option is not the main obstacle to reform--certainly not so far as public opinion is concerned. The biggest problem is cost. Obama has ruled out additional public borrowing and middle-class tax increases. As he explained, this means the plan will have to pay for itself. Wider coverage will have to be financed mainly with cuts in public spending on healthcare, and these in turn will mostly fall (as they must, given the scale of the program) on Medicare. The idea that cuts of the necessary size can be found, as he says, entirely by cutting "waste and inefficiency" is implausible. Obama tried hard to reassure Medicare beneficiaries that they have nothing to fear from this reform. I doubt that he succeeded, but we will see. Tactically, this is the project's weakest point.

Still, it was an excellent speech. He will most likely need to give another, just as good--again to the nation over the heads of its politicians--if and when a hesitating Congress is ready to vote on a final measure. With so much at stake in this for the Democrats, I've never put the chances of success at less than 50%. It's still far from a sure thing, but I'd say Obama improved the odds tonight.