In response to that question and assertions by Kevin Drum, at Bloomberg View Megan McArdle answers it in the negative:
I agree that higher subsidies and a stronger mandate would have made Obamacare less of a policy train wreck; we probably wouldn’t be so worried about a death spiral if they had passed. On the other hand, it would have made the program much more of a fiscal train wreck. Kevin suggests that they should have just raised taxes on the rich, but for reference, the total repeal of the Bush tax cuts was projected to raise only about two-thirds of the amount needed. And since they were projected to expire, that was not a source of revenue that Democrats could use to fund Obamacare.
Funding this extra entitlement by tapping the rich would have been, to put it mildly, unpopular with an important part of the Democratic base: urban professionals. They would have, in the course of a few years, seen about 10 percent of their gross income, and a considerably larger fraction of their take-home pay, vanish. Nor would they be excited when politicians came back to them for even more money to pay for little incidentals like our growing entitlement gap.
Nor, as Kevin suggests, could Democrats have simply hand-waved the cost away. Bills have to be scored by the Congressional Budget Office. The Congressional Budget Office would not have scored heartfelt paeans to the economic benefits of broader health coverage (and to the extent that they would have, most of those benefits were already in the score the bill got.) If Democrats had tried to pass a bill that cost $2 trillion over 10 years, the Congressional Budget Office would have scored it as such, and that is the cost that the media would have reported. This — not a tragic surfeit of honesty — is why Democrats didn’t take the-time-honored approach of telling wild lies about what their plans would cost.
The Affordable Care Act is built on certain principles: guaranteed issue (everybody should be able to get insurance) and community rating (people living in the same area and in the same age cohort should pay the same premiums). Either one of those principles can exist within the insurance framework but together they can’t. For a program to be insurance, premiums must be proportional to risk.
Kevin’s strategy rests on some assumptions: that a plan of any cost can be financed by taxing “the rich” and that there is no limit to the political acceptability of such a plan. In her article Megan calls the latter assumption into question.
But there’s another problem. With healthcare costs rising at a multiple of the increase in other costs and, importantly, at a multiple of the increase in incomes, it wouldn’t be a case of increasing taxes once and forget it. It would be increasing taxes again and again and again to finance a hungry healthcare system which I characterized in my last post as “writing providers a blank check”. Can you envision politicians doing that? Me, neither.
Politically, the ACA was built on the desire to make insurance coverage available to those with pre-existing conditions and to make said coverage more affordable for individuals and businesses currently paying for it. Democrats could have done this more effectively and transparently with tax increases that expanded Medicaid to cover the working poor, but they probably would have received no love from those paying more taxes (while their private insurance coverage costs continued to rise), nor from those forced into a poverty program. Instead, we got a lot of misdirection about cool websites and exchanges forcing down prices through competition, and subsidies for 63 years olds (whose votes are more important) paid for by 20 year olds.
The political answer should be clear now. If the ACA was an important first step, it was too big. The Democrats needed to get Olympia Snowe’s vote on whatever reform was passed, in order to protect Democratic moderates from charges of passing partisan legislation. Only by protecting the Democrat’s vulnerable flank, could they imagine a second step, or sustaining legislation.
Obama is a bit delusional to think McConnell asserted unprecedented discipline on the Senate, Snowe in particular, but a couple of other Republicans, frequently voted against party. But getting Snowe probably wasn’t going to be done with tax increases, just incrementalism. The Democrats should have taken the win to the extent they could and run against the Republicans for the rest.
Said this on other post, but I am sure you realize that politicians are frequently allowed to vote against the party when there are enough votes to allow it, or when it is clearly a bill with popular support that should pass. It lets the true conservatives maintain their purity, while letting moderates demonstrate their “independence”. However, on the important votes they are pulled back in.
Steve
Your assumptions about the U.S. Senate discipline are not accurate. Some legislative bodies have it, but that one does not. What the majority leader does is prevent bills from coming to the floor. That is not a minority leader power.