How Obamacare repeal sets the table for the entire GOP agenda

President-elect Donald Trump and his Republican allies in Congress are ready to press ahead with Obamacare repeal come January.  The effects of repeal will be devastating enough.  But repeal also triggers problems that help the GOP justify the rest of its agenda.  By repealing Obamacare, Paul Ryan and company will try to bootstrap in drastic changes across government in the name of reducing deficits and stabilizing federal programs like Medicare.

Republican plans to repeal Obamacare would exact a massive human toll.  Repeal could throw upwards of 30 million people off of their health insurance, doubling the current uninsured rate.  And if Republicans gut the law’s protections for those with pre-existing conditions, 52 million people would struggle to find affordable insurance.

The human carnage of repeal is meant to coerce Democrats into going along with a right-wing replacement bill.  Republicans will have 52 votes in the Senate in 2017.  They can repeal most of Obamacare with 51 votes for a reconciliation bill.  But to enact new legislation replacing the law, they’ll need eight Democratic votes to overcome a filibuster.  The thinking is that creating an Obamacare cliff with massive human disaster on the other side will compel cooperation from Democrats.

Never mind whether this scheme can actually work without provoking a stampede of insurers out of Obamacare’s marketplaces during the transition period leading up to the cliff.  Like the hostage-taking expeditions during the Obama administration—the debt ceiling fiasco, the fiscal cliff, the government shutdown—this is another instance of the GOP manufacturing a crisis in order to strong-arm its policy priorities through Congress.

Conveniently for Republicans, Obamacare repeal opens the door to far more of the conservative agenda than just upending the individual insurance market.  According to a new report from the Brookings Institute, repeal would also jeopardize the solvency of Medicare.  Obamacare included a 0.9 percent payroll tax on incomes above $200,000 to help shore up Medicare’s finances.  This extended the solvency of the program’s trust fund until at least 2028.  Without this tax, Medicare could go broke in less than eight years.

It’s impossible to imagine conservatives restoring any of Obamacare’s taxes on the wealthy.  (Indeed, cutting these taxes is part of the appeal of Obamacare repeal for Republicans.)  And by repealing the law, Republicans also drag Medicare closer to crisis.  It’s easy to picture Ryan and others seizing the opportunity to warn that Medicare cannot be sustained without drastic changes along conservative lines–the type of reform Ryan has spent years pursuing.  The conservative vision would terminate our commitment to Medicare as a government-run insurance plan, and replace it with a voucher payment to seniors to shop on their own for private insurance plans.

So by repealing Obamacare, Republicans worsen Medicare’s financial position and thereby tee up the case for privatization.  But that’s not all.  The passage of Obamacare has corresponded with a marked slowdown in the growth of healthcare costs over the last several years.  The U.S. is currently on pace to spend $2.6 trillion less on healthcare than we expected before Obamacare was passed.  It’s difficult to assess how much Obamacare contributed to these savings, but it undoubtedly played a part.

If this slowdown is reversed by repeal, and healthcare costs begin to balloon again, the GOP could well use it as an excuse to pass the rest of its radical policy prescription across the entire gamut of American insurance options.  These reforms range from block-granting Medicaid to capping the tax exclusion for employer-provided insurance to promoting higher deductibles for more people.

Repeal could even give Republicans space to shoehorn in their desired policies outside of healthcare.  The Brookings report also found that Obamacare repeal will worsen long-term deficits.  Republicans will also undoubtedly pursue massive tax cuts near simultaneously with Obamacare repeal.  This combination will cause deficits to explode.  And as the Congressional Budget Office begins projecting larger and larger deficits, Republicans will have a ready-made excuse to justify austerity politics and massive cuts to safety net programs and other domestic spending.

We’ve seen this story before: the GOP leverages a crisis of its own making to push through its chosen policy prescriptions.  Even with a congressional majority, Republicans won’t be able to quit governing through crisis mode.  Their policy agenda will be painful for millions of Americans, and deeply unpopular because of it.  Republicans need a pretext to bolster the political necessity for making sweeping changes to our safety net.  Repealing Obamacare unlocks a whole host of rationales to help the GOP do precisely that.

But this also allows Democrats and other Obamacare defenders to lay out the full stakes of repeal.  Obamacare repeal doesn’t just rob insurance from the millions who have gained coverage under the law.  Repeal also jeopardizes the financial sustainability of Medicare for future retirees.  Repeal threatens to ignite higher healthcare inflation, raising premiums and eroding employees’ take-home pay.  Repeal erodes the financial standing of a whole host of programs for low-income Americans that are vulnerable to arbitrary budget cuts.  The implications of repeal are simply massive.

By repealing Obamacare, the GOP is trying to tee up its entire legislative agenda.  Liberals have an obligation to shout from the mountaintops about the full harm of this conservative exercise in bootstrapping.

The team quietly building a child allowance

I have a new post up at Medium based on a conversation with professor Hiro Yoshikawa, and work he and others are doing to build out the theoretical and empirical case for a child allowance in the United States:

It’s a distant thought now, but someday liberals will again get the chance to advance a progressive agenda on the national stage. And in the grim shadow of November’s electoral defeat, the future of progressive thought is already being hatched. Academics and researchers are quietly building the case for a bold new policy to support American families in cities across the United States: a universal child allowance.

Read the rest here.

The incredibly weak case for repealing Obamacare

Unified conservative government in Washington has given Republicans an unobstructed path to repeal Obamacare. As Vice President-elect Mike Pence recently assured a group of Heritage Foundation donors at the Trump International Hotel, “We’re going to repeal Obamacare lock, stock and barrel,” calling repeal the incoming administration’s “number one priority.”

But as clear as the repeal path may be, it’s worth pausing to reflect on the actual merits supporting the unrelenting conservative attack on the law. As it turns out, the case against Obamacare is incredibly weak.

First and foremost, more than 20 million people have gained coverage under the law, driving the uninsured rate to historic lows. These gains would be reversed by repeal. Repeal could cost as many as 30 million people their health insurance, causing the uninsured rate to double. And without Obamacare’s protections, 52 million people with a preexisting condition may struggle to find affordable insurance.

Moreover, many of the controversies that conservatives ginned up while the law was being drafted never came to pass. The public option for health insurance was scrapped before the law was enacted. The Cadillac Tax on high-end health insurance plans has been perpetually delayed. The supposedly job-killing employer mandate took effect this year, yet private sector employment continued to rise, as it has every month since Obamacare became law. The cancellation of low-quality insurance plans, which affected a small fraction of the country in 2013, was a one-time product of the transition to Obamacare. “Death panels” were never a real thing. The real, much more innocuous idea—reimbursing doctors for counseling patients about end-of-life care options—was stripped from Obamacare, and then quietly adopted by regulation last year.

Still, conservatives are nonetheless forging full steam ahead with kneejerk Obamacare repeal. “This law, you have to remember, is hurting families in America,” Speaker Paul Ryan recently said with little regard for the millions of families insured under the law. “So we have to bring Obamacare relief as fast as we possibly can in 2017.”  He and other Republicans now cling to two chief objections to Obamacare: its effect on out-of-pocket payments, and its mandate to carry health insurance. Neither would be improved by repeal.

Republican complaints about premiums under Obamacare are a shameless exercise in bootstrapping. It’s true, premiums on most of Obamacare’s exchanges rose significantly this year. But Republicans themselves triggered part of these premium hikes by repealing Obamacare’s risk protections for insurers last year. Conservatives intentionally wounded the law, and then complained when insurers backed out and premiums rose because of it.

Moreover, premium hikes were surprisingly low over the previous two years, so some of this year’s increase came from insurers returning to expected premium levels. It’s also a product of insufficient competition. More insurers competing for business would produce better bargains for consumers.

There are sensible ways to fix these problems that are far less disruptive to our healthcare system than wholesale repeal. Young, healthy people have sat out of the marketplaces in greater numbers than expected. If more of these customers purchased insurance, more insurers would participate and consumer costs would be lower. To attract more healthy customers, the marketplaces need to offer more appealing coverage options. This could be accomplished by allowing the federal health exchange to actively negotiate better rates with insurers, like California’s exchange already does. The government could also offer more generous cost-sharing subsidies to help with out-of-pocket expenses. And we could allow those nearing retirement age—say, individuals 55 and above—to sign up for Medicare. This would pull some of the oldest and costliest patients out of the individual marketplaces, lowering premiums for everyone else, and making those marketplaces less risky for insurers.

Repeal, on the other hand, would only make matters worse. To the extent Republicans succeed in lowering premiums under an Obamacare replacement, they would likely do so only by weakening the quality of insurance. Young and healthy people may see lower-cost options, but older and sicker people could see substantial premium increases. And costs on the individual market could skyrocket if Republicans try to retain Obamacare’s ban on preexisting condition exclusions without implementing an adequate substitute for the individual mandate.

Which gets to the long-time conservative bogeyman of Obamacare: the individual mandate. The mandate is the lynchpin the holds the law together—you can’t guarantee private coverage to the sick at fair rates without also guaranteeing insurers a broad pool of healthy customers. The mandate offers everyone a choice: you can do your part to secure a more equitable healthcare system by either purchasing insurance or paying a tax.

Even though they invented the individual mandate, conservatives have spent years railing against it as an unconscionable intrusion on individual liberty. But if the mandate impairs freedom at all, it’s the freedom to suffer from health insecurity and vulnerability to illness, tax-free. That’s hardly a freedom worth preserving.

Instead of an individual mandate, most conservative repeal plans adopt a “continuous coverage” requirement. Like the mandate, this would require Americans to continuously carry insurance coverage. But rather than paying a tax to the government, those who go through a spell without insurance would get price-gouged by insurance companies. These individuals would be hit with higher premiums when they reenter the insurance market, and potentially really high premiums if they have a preexisting condition.

It’s hard to say whether this complex penalty will even work, given that the so-called “young invincibles” the individual market desperately needs are prone to lowballing the likelihood of future illness. But the conservative individual mandate replacement is, if anything, a more draconian penalty than Obamacare’s mandate. The conservative plan adds insult to injury for those who fall on hard times: If you lose your insurance, you get penalized with higher future premiums and inadvertently waive your right against discrimination on the basis of illness. What’s worse, the conservative plan makes it harder for those down on their luck to afford coverage in the first place. Because conservatives would abandon income-based subsidies, many people will be caught in an impossible situation: buy insurance you cannot afford now, or get hit with even higher premiums in the future.

Currently, Republicans are trying to devise a “repeal and delay” scheme to avoid upending the individual markets while they work out a replacement bill. But the difficulty of these efforts only underscores the fact that Obamacare is fundamentally a moderate reform. Ironically, repeal would be much easier for Republicans had Obamacare expanded insurance through a single-payer, Medicare-for-All scheme. In that alternative universe, Republicans could simply schedule Medicare-for-All to sunset on, say, December 31, 2018, and the to-be-determined right-wing reform would seamlessly kick in the next day, with minimal turmoil in the interim.

Instead, Obamacare opted for a more cautious approach dependent on the voluntary participation of private insurers. This has made it harder to expand coverage and guarantee insurance offerings across the country. But at the same time, the prospect of a painful zombie transition period on the exchanges also makes the law harder to repeal. Insurers could exit the marketplace in droves after a repeal vote, as if fleeing a sinking ship. This would cause real pain in the lives of the millions of Americans left uninsured, and political pain to the repeal-obsessed GOP.

Conservatives believed their own spin that Obamacare was a big government monstrosity. Now in a role of actual power and responsibility, they are grappling with the inconvenient truth that the law really is a carefully crafted, moderate reform bettering the lives of millions of Americans—all of which makes the unthinking march toward repeal deeply irresponsible.

The path to repeal is wide open for Republicans. And raw power politics means they can pretty much do as they please. But in a democracy, the party in power still owes the country a justification for its policy agenda. And when you really get down into it, the case for Obamacare repeal is spectacularly weak.

Note: This post is cross-posted at Medium.

The GOP’s Obamacare cliff is closer than they want you to believe

During the budget wars of the Obama administration, congressional Republicans regularly courted national disaster by forcing fiscal cliffs, debt cliffs, and austerity cliffs on the country.  Now in control of Washington, Republicans look poised to set up an Obamacare cliff.  This might be the most reckless act of GOP gamesmanship yet.

When it comes to Obamacare, the GOP is the dog that caught the car.  Republicans have railed against the law for years, voting to repeal it 60 times and shutting down the government in protest.  But now that they are in power, Republicans are finding themselves utterly ill equipped to take action against the law.  That’s because they still haven’t yet readied a nuts-and-bolts health reform plan over the last six years.  Even though “repeal and replace” has long been their rallying cry, conservatives have spent precious little time forging a unified strategy for the latter part.

Aside from policy considerations, “repeal” also has a simpler legislative path than does “replace.”  The GOP can repeal most of the law through a reconciliation bill on a bare-majority vote, meaning without Democratic cooperation.  To affirmatively pass a replacement law, however, Republicans will need Democratic votes, unless they kill the filibuster (which some key Republican senators are reluctant to do).

This combination of policy uncertainty and political expediency is pushing the GOP toward a strategy of quickly repealing the law on a time delay.  Without a readily available replacement, Republicans will try to repeal the law while postponing its actual demise until perhaps January 2019, after the 2018 midterm elections.  This would ostensibly give Congress two years to devise a replacement for the law, extending Obamacare a two-year fuse until it explodes.

GOP health policy expert James Capretta objects to this strategy on the grounds that Congress will wind up perpetually extending Obamacare’s two-year lifeline.  “If . . . the GOP sticks with a repeal-only bill,” Capretta argues, “there is a high probability that they will never get around to agreeing on a workable replacement plan. At which point the odds would then favor retention of the ACA, or something close to it, as the only viable way forward.”

Capretta points out that legislative momentum will only wane after 2017 and into 2018.  The likelihood of an Obamacare replacement doesn’t increase over time, but dwindles by the day.

Keeping Obamacare on the books may be the conservative nightmare scenario.  But the other consequences of the GOP’s reckless repeal-and-delay course are far more dire.  For one thing, the mere contemplation of repeal, let alone actually passing a repeal bill, may be enough to create an insurer stampede out of the law’s marketplaces.  Insurers must decide whether to offer plans for 2018 in the marketplaces before May 2017, just three months into the new Congress.  Many will be unlikely to participate in a program that is in the midst of being slowly killed off.  This is particularly true given the already fragile state of the exchanges, which are in need of constructive reform, including previous wounds inflicted by the GOP to strip the law’s protections for participating insurers.  If insurers flee a perceived sinking ship, the law will cease to function whether it’s officially repealed or not.

If the GOP forges ahead with repeal-and-delay and triggers an insurer exodus in the process, there very well may not be any can to kick down the road again come January 2019.  The law could become zombie health reform with impotent, ghost-town marketplaces.  There would be nothing left for Congress to extend.

So the GOP likely cannot reap the political benefits of repeal while putting off the tangible costs for two years.  And those costs would be very real.  The private insurance markets in all fifty states could seize up, making it functionally impossible for the millions of people who currently rely on Obamacare’s exchanges today to obtain coverage.  The historic gains we’ve made in expanding insurance would quickly reverse.  Repeal-and-delay would take a massive human toll.

So if the exchanges are mostly bled dry by Republicans before January 2019, what then?  Once the GOP lights this fuse, the rapid deterioration on insurance markets would probably place immense pressure on Democrats to cooperate with right-leaning reform efforts.  And if the 2018 midterm elections become a backlash against Trump and restore Democrats to power in Congress, then Democrats would be left to clean up the healthcare mess that the GOP is about to create.

The GOP’s repeal-and-delay strategy is ostensibly meant to buy Republicans time to devise a substitute to center-left health reform.  But it’s hard to see what Republicans will be able to dream up in two years that they couldn’t in six.

Setting up an Obamacare cliff once again triggers a high-stakes game of chicken.  But unlike previous congressional chicken matches, blinking at the last hour might not spare the harm this time.  Rather, because Obamacare relies on private health insurers to expand coverage (i.e., because Obamacare is a centrist attempt at universal healthcare), the harm of repeal may be realized well before Congress even has a chance to flirt with plunging over any self-concocted cliff.

So Republicans pushing repeal and Democrats opposing it need to understand that “repeal and delay” is functionally no different than straight-up repeal .  Delay does not postpone the fight for another day.  When that day comes, it will already be too late — the law’s foundations will already be drastically weakened, perhaps entirely moribund.

Republicans are trying to set up yet another cliff to force congressional action.  But the cliff is much, much closer than it might appear.  The question is who truly realizes it.

The missing Democratic narrative

In the fall of 2015, the economists Anne Case and Angus Deaton discovered something disturbing: the mortality rate for middle-aged white Americans—and only them—had sharply increased over the previous 15 years.  Most of this increase was from an alarming explosion in the number of suicides and “poisonings” from drug overdoses among this population.

Meanwhile, Donald Trump was on his warpath toward the Republican nomination.  And he was winning heavily in the distressed communities that Case and Deaton studied, cleaning up in the counties with the highest middle-aged white mortality rates.  These places were littered with the skeletons of abandoned factories, but were ghost towns when it came to jobs and degrees.  The misery and desperation was ripe for Trumpism.

Case and Deaton had landed upon the most troubling and violent indication of what is a larger existential unease within much of the country.  Deaton speculated that these Americans had “lost the narrative of their lives — meaning something like a loss of hope, a loss of expectations of progress.”

Donald Trump became president-elect last week in part because he filled in that narrative with what had gone wrong.  For “the forgotten men and women of our country,” as he called them, who feel that they have been forcibly displaced from the American economy and society, Trump provided a story grounded in resentment and named culprits.  They’d been shafted by Washington elites cutting bad trade deals that ship jobs overseas, he told them.  They’d been cast aside for immigrants pouring over the border with drugs and crime, he warned.

This narrative aligned with what many people want to believe and what they see around them.  They see shuttered manufacturing sites that once employed thousands.  They see superstores where nothing is made in America or by Americans.  They see neighbors and family members consumed by opioids.  They see the lives of minorities and immigrants who “cut in line” ascending, while theirs languish.

Liberals can and should object to the honesty and intolerance embedded in Trump’s tale.  Yes, we’ve done too little to cushion workers from the dislocations of trade.  But neither Trump nor any other politician is bringing wide-scale manufacturing employment.  And while immigrants are an easy scapegoat, they have little impact on the wages or employment of native-born Americans.

Trump’s story is a manipulative con.  But it’s the only one that Americans were offered in this election.  Hillary Clinton did little to offer a competing narrative that spoke to the continuing anxieties and inequalities of millions of Americans.  For all the progressive policy ideas Clinton developed, she never synthesized them beyond the contentless message “Stronger Together.”  The reach of her campaign left her unable to develop a message with any specificity.  Hoping to rout Trump by a historic margin, she crafted a tent so big that it collapsed in on itself.

This has revealed a fundamental problem for Democrats.  For six years, the party has gotten walloped in virtually every national and state election  where Barack Obama’s name has not been on the ballot.  As he exits the national stage, the Democrats can no longer depend on his coattails.  They need to win by standing for something that connects with voters.

There is one clear narrative percolating within the Democratic Party.  And it’s coming from the party’s left flank.  Elizabeth Warren and Bernie Sanders are interpreting the election results as reflecting widespread frustration with an economy rigged by and for the wealthy and powerful.  In their version, there has been a thirty-five year project of deliberate government policy and tax cuts that redistributed money to the most well-off.  This hollowed out the programs, investments, and institutions that once upon a time created a thriving and secure American middle class.  The wealthy reached the highest rung of the social ladder and then pulled the ladder up behind them.

This too makes for a compelling story.  And there’s a good deal of truth to it.  The growth in inequality in the United States closely corresponds with the onset of the Reagan revolution and the shift toward supply-side economics.  At the same time Reagan was slashing taxes on the rich, deregulating industry, and implementing free market reforms in the early 1980s, inequality began rising.  Economists on the left argue that these kinds of unbalanced tax cuts and reductions in public programs increase inequality.  As inequality boomed, incomes for the middle stagnated.  And for those becoming displaced and rendered obsolete by the economy, the bottom fell out.

This would be an exceptionally opportune time for liberals to start loudly making this case to the public.  With unified conservative control of Washington, Republican leaders are gearing up to pass a round of massive tax cuts tilted heavily toward the wealthy.  Both Trump and Paul Ryan have proposed trillions of dollars in tax cuts.  They’ll just need to sort out whether half of all the benefits will go to the top 1 percent (Trump’s plan) or if 99.6 percent will (Ryan’s).

These tax cuts will inevitably rob from important social spending on education, healthcare, food assistance, and poverty programs.  They will suck more money out of the very communities that need it the most.  This will exacerbate inequality, not reverse it.

By offering up this kind of narrative, Democrats can accomplish two things in one fell swoop.  First, they can counter the fraudulent story that Trump has successfully sold so far.  Second, they can show that Trump never had the back of working people—that he’s looking out for his interests and those of his class by passing yet another typical Republican supply-side tax cut.

To build a party that isn’t dependent on one man, the Democrats need to contextualize and offer solutions for the discontent afflicting many Americans.  Trump did that, even if his pitch was a working-class sham.  To mount an effective opposition and win back power, Democrats need to offer voters a narrative of their own.

The awe-inspiring and dispiriting United States of America

It’s a whole new world, and like most everyone else, I didn’t see it coming.  Coming to grips with what Trump’s America looks like and means will take a long, long time.  But my immediate, still-distraught reaction is up at Medium.  The concluding thoughts:

The last eight years have seen a remarkable amount of social progress. Marriage equality became a reality. The century-long quest for health reform came to pass, protecting millions from devastation by illness. We fought off economic catastrophe and have made steady gains ever since. We created millions of jobs and built a thriving renewable energy industry for the twenty-first century from the ground up. We made serious inroads to curtail environmental harm and combat climate change. We took steps to corral a financial sector that helped land the entire economy in peril.

Trump’s election jeopardizes many of these gains. But it does not erase the fact that we are a society capable of producing the achievements of the Obama years.

We have seen figures like Trump before in our politics — people like George Wallace, Strom Thurmond, Jesse Helms, and other poisonous demagogues. Never before have we allowed one to come close to our highest office, let alone win it. That is unprecedented in our history.

But so was electing a black president. This may seem confounding — after all, how could the country that twice elected Barack Obama elect Donald Trump?! But the United States is a baffling and frustrating place — at once both awe-inspiring and deeply dispiriting. Admirable progress over the ills of our history often gives way to reactionary backlash and retrenchment.

We have a long and storied history of taking one giant leap forward, only to follow it up with a gut-wrenching step back. Lincoln’s freeing of the slaves in 1863 and a decade of Southern Reconstruction gave way to nearly a century of Jim Crow, lynching, segregation, and violent white supremacy. The outlawing of segregated schools in 1954 triggered massive resistance to black and white children learning together. The Civil Rights revolution of the 1960s fed Richard Nixon’s silent majority and the ensuing limitations on civil and equal rights. That Barack Obama will now turn the White House over to the birther Donald Trump is tragically in keeping with the rhythms of American history.

Yet we can change these rhythms. Obama likes to quote Martin Luther King’s statement that the arc of the moral universe is long, but it bends toward justice. Tuesday’s jarring electoral result is a reminder that the moral universe bends only from the dogged persistence and faithful agitation of those refusing to give up the fight. Progress is not guaranteed, and advancement is not simply the natural course. Left alone, the moral universe quickly reverts back toward a darker past. When we ease up, it eases down.

But by fighting on, we hasten the day when our country’s government once again stands for hope, progress, and decency. So don’t look to Canada. Don’t give up on America, and don’t drop out of politics. Despair today. Then rejoin the fight.

The reconciliation option

Jacob Hacker dangles an intriguing legislative prospect in his New York Times op-ed promoting a public option as a cure to Obamacare’s woes.  Specifically, he suggests that Democrats could enact a public option with a bare-majority vote in Congress through the budgetary procedure of reconciliation:

This year, Senate Republicans, providing another lesson, passed legislation that repealed the Affordable Care Act through the budget process, which isn’t subject to a filibuster. (President Obama vetoed it.) If that’s possible under the budget rules, creating a public option should be, too — especially since it could reduce the deficit by tens of billions of dollars a year.

Reconciliation is a tool that allows for expedited consideration of budgetary legislation.  Importantly, it allows legislation to overcome the Senate filibuster and pass with simple majorities in each chamber of Congress.  The filibuster, of course, is the veto power invoked by 41 minority party senators to obstruct the legislative will of the majority.  It’s not part of the Constitution, and as wielded by Senate Republicans, the filibuster has created an unnecessary de facto super-majority requirement for virtually all congressional action.  Reconciliation is a safety valve to let lawmaking go forward in the face of obstructionist filibustering.

What can and cannot be achieved through the reconciliation process depends heavily on precedent and the whims of the Senate parliamentarian.  Most famously, Obamacare was originally heaved over the finish line through reconciliation after the Democrats abruptly and unexpectedly lost their Senate super-majority in 2010.  The main requirement for reconciliation is that it must be budgetary neutral, and may not add to the federal deficit.

During the past year, Paul Ryan and House Republicans have been steadily expanding the bounds of reconciliation.  Congressional Republicans have passed bills repealing Obamacare, including its insurance subsidies, Medicaid expansion, and individual and employer mandates.  They even used reconciliation to de-fund Planned Parenthood.

None of these bills made it past President Obama’s veto.  But they did pass muster as appropriate uses of reconciliation with the Senate parliamentarian.  This helped Ryan create precedent for 2017, when he hoped to have a Republican president to sign off on his bills instead of vetoing them.  Indeed, in early October, Ryan was openly talking about his plans to pass much of his agenda through budget reconciliation next year.

But the last month has turned the tables on Ryan’s reconciliation plan.  After a catastrophic month for Donald Trump, the presidency is Hillary Clinton’s to lose, Democrats have a good chance to retake the Senate, and may even have the House within reach if the agony of Trump sufficiently depresses Republican turnout in November.  Ryan’s hopes to push his “Better Way” agenda through reconciliation have been dashed, and now it’s the Democrats who are looking for creative ways to enact their legislative priorities.

So could a public option really be passed through reconciliation?  There’s good reason to think so.  According to the Center on Budget and Policy Priorities, a good deal of major legislation has relied on reconciliation, including welfare reform in 1996, and the 2001 and 2003 Bush tax cuts (which actually increased the deficit and debt).

Most relevant, Congress has used reconciliation to create major health insurance programs before.  In 1985, it used reconciliation to extend health coverage to workers who have lost their jobs (so-called “COBRA” insurance).  In 1997, it used reconciliation to create the Children’s Health Insurance Program, extending coverage to millions of low income children.  And also in 1997, it used reconciliation to create Medicare Advantage.

Not to mention that Obamacare itself (and repeated efforts to repeal it) relied on reconciliation.  If the original law fit the standards of reconciliation, then so too should  most efforts to tweak and improve it.  If balanced with new revenue sources, then Democrats could conceivably enhance insurance subsidies, lower the Medicare eligibility age, expand Medicaid, and enact a whole host of other health reforms all through reconciliation without regard for the hurdles posed by congressional Republicans.

If Democrats eke out only the slimmest majorities in Congress, it doesn’t have to be a recipe for gridlock and legislation stymied by Republicans relegated to minority status.  Much of the Democrats’ health reform 2.0 agenda could be passed through reconciliation.  For that, no small degree of thanks is owed to the precedent created by Paul Ryan and his fellow repealniks in the GOP congressional caucus.

The problem with Obamacare is (still) politics

This week’s announcement of large premium hikes across the health insurance marketplaces has brought another round of Obamacare hand wringing. The average premium on silver plans on exchanges across the country is set to rise by 25 percent this year. Worse, competition is dwindling on the exchanges, as one in five shoppers will have to choose from plans offered by only a single insurance company.

This has left many once again wondering what the problem is with Obamacare, and whether the law is failing. And once again, the core problem with Obamacare comes down to politics.

Obamacare has achieved remarkable successes. It has driven the uninsurance rate to historic lows. Between the law’s Medicaid expansion, marketplace enrollment, and adult children remaining on their parents’ insurance plans, 20 million people have gained coverage from Obamacare, with another million expected to sign up during the coming enrollment period. The law guarantees a right to purchase insurance for those with preexisting conditions, and outlaws insurer-imposed caps on annual coverage. It has also corresponded with a dramatic slowdown in U.S. healthcare spending.

But there is persistent unease (to put it mildly) on the law’s health exchanges. Big insurers have found it hard to create financially viable exchange products, and the exchanges are quickly turning into marketplaces for Medicaid-type plans and customers. The recent premium spikes just add to the exchanges’ struggles.

Now it should be noted that most Obamacare customers will not pay the full sticker price of these increases. The increases reported are before federal subsidies kick in. These subsidies will insulate most shoppers from major premium shock.  Moreover, enrollees in previous years have proven remarkably willing to change plans in response to price changes, and could do so again this year.

Still, the pre-subsidy premium increases do reveal an ongoing turmoil in the marketplaces. There are four principal reasons for rising premiums:

1) Insurers systematically underpriced premiums during the first years of enrollment. Premiums rose by just 2 percent in 2015 and 7 percent this year. By jacking up premiums this year, insurers are bringing prices in line with earlier expectations. In fact, average premiums for 2017 are now in line with Congressional Budget Office forecasts before the law was enacted.

2) Important insurer protections in the law were allowed to lapse, exposing participating insurers to higher costs and risks. The law’s risk adjustment mechanisms insulated insurers from higher-than-anticipated costs from a sicker population enrolling in their plans. This encouraged insurer participation and kept premiums low. However, Republicans latched on to risk adjustment as an insurer bailout. Senator Marco Rubio, looking to bolster his anti-Obamacare cred, maneuvered a repeal of risk insurance through Congress this year. The lack of risk adjustment is now reverberating into insurers exiting the marketplaces and customers facing higher premiums.  (Good job, Marco!)

3) The mix of customers on the exchanges is older and sicker than expected. The administration originally hoped that young adults would account for 38 percent of all enrollees. Their actual share of enrollment has only would up being just 28 percent. Enrollment in general has been lower than the administration predicted. But a relatively older and less healthy population of enrollees incurs higher costs for insurers, causing premiums to increase.

4) There is less competition on the exchanges than anticipated. Some insurers are finding it hard to turn a profit and exiting the exchanges altogether. More and more parts of the country are being left with fewer and fewer choices. Without competitive pressure, insurers can raise prices without losing enrollment, essentially controlling the market.

There are relatively straightforward solutions to these problems. We should restore risk insurance mechanisms. And to encourage enrollment (particularly among the young and healthy), we could stiffen the individual mandate penalty, while simultaneously sweetening the law’s subsidies and cost-sharing benefits. And to generate competition, we should create a public option, at least in those states with too few private insurance offerings.

Paul Waldman relays several more good ideas for improving the law from Paul Starr of the American Prospect, including:

  • “Require all insurers who want to sell in the individual insurance market to offer their plans through the exchange, so they couldn’t cherry-pick individuals outside the exchange . . .
  • “Reduce the waiting period for those on disability insurance to get Medicare coverage from two years to six months to move some of the very high-cost enrollees out of the individual-market pool.
  • “Require any insurer that wants to offer a Medicare Advantage plan in an area also to offer a plan in the marketplace for under-65 enrollees.
  • “Have the federal exchange adopt the procedures used by California in actively bargaining with plans instead of acting as a passive clearinghouse[ ].
  • “Create a public option for those aged 55-64 clearly identified as an early buy-in to Medicare.
  • “Create a second federally run public option for enrollees from 18 to 54.
  • “Restore the risk corridor and reinsurance provisions that have expired that were intended to protect exchange plans against adverse selection.”

These are all positive solutions to Obamacare’s woes. Expanding Medicare eligibility for near retirees and the newly disabled would help remove some high-cost patients from the exchanges, thereby taming premiums for everyone else. California actively negotiates better prices for consumers as a condition for insurers to list on its exchange. Because of that, premiums in California are rising by just 5 percent this year. Letting the federal exchange negotiate too would put downward pressure on premiums for more customers in more states.

But while these ideas are great in theory, most have little plausible path to becoming law. Hillary Clinton hopes to build on Obamacare by increasing subsidies and creating public options.  Yet Republicans in Congress have little interest in doing anything to shore up the law.  Six years after passage, the conservative anti-health reform fever has yet to break, and massive resistance remains firmly in place.

The conceptual foundations of Obamacare are not broken; only its politics are. We know what we need to do to improve the law, but the logjam of health politics in Washington has locked the rushed, imperfect bill passed in 2010 into a stasis that hasn’t been imposed on any other piece of major social legislation in American history. Big laws need tweaking and fixing along the way, but Congress just won’t do that for Obamacare.

Jonathan Chait is right when he argues that Obamacare has been a policy success but a political failure. But it’s more complicated than the law being a substantive triumph with a public relations problem. Obamacare’s PR problem is now actively hindering its substantive real-world success. If the law had broader political support, reasonable reforms could get passed, and its exchanges would be made more functional.

So for all the actuarial and wonkish analysis of what ails Obamacare, its core problem remains political. Republicans have no interest in rectifying the law, and many probably actively hope it crumbles from wont of legislative care and maintenance. Obamacare does not require a fundamental overhaul or a desperate rejiggering. What it needs is a legislative majority interested in its success.

A Nordic cure for American anxiety

Any time liberals try to expand the American social welfare state, conservatives can be counted on to howl in resistance in the name of freedom.  Government helping parents pay for childcare?  An invasive infringement on the freedom of families to make their own childrearing arrangements, according to the conservative National Review.  Guaranteeing paid family leave for all workers?  A job-killing big government burden on free enterprise, according to conservatives like Sen. Marco Rubio.  Providing universal healthcare through the private insurance market?  Government coercion on the freedom to take your chances without health insurance, according to virtually all Republicans.

We’ve become accustomed to this serve-and-volley routine in American politics.  Liberals pitch their policy ideas in terms of fairness, justice, and equity.  Conservatives furiously respond as the guardians of freedom from government overreach.

But this one-sided conception of what American freedom means warps the debate and obscures a richer, fuller understanding of what it means to enjoy the fruits of liberty in the twenty-first century.  Sometimes it takes a voice from outside of the bubble to show us what we’re missing.

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In The Nordic Theory of Everything, Finnish journalist Anu Partanen provides that voice.  Partanen was born in Finland but moved to the United States as an adult.  Upon landing in America, Partanen quickly noticed that for a country that prides itself as the land of opportunity, American life was remarkably laden with anxiety, dependence, and constriction.  With little in the way of public support, Partanen encountered the reality that Americans are largely on their own to obtain basic modern necessities and navigate complex systems that are publicly provided in other countries.  Americans had little sense of just how unfree their lives were.

Partanen’s home country of Finland provides a robust and modern welfare state.  Back home, Partanen had enjoyed a whole host of public benefits: simple and comprehensive universal healthcare, a year’s worth of paid disability leave, nearly a year of paid parental leave (with the option of lesser-paid leave for an additional two years), affordable public daycare, universally high-performing K-12 education, free college, and free graduate school.

In the United States, however, Partanen was struck by the degree to which Americans are on their own to manage the complexities of modern life, and how this fosters strangely backward relationships.  “[T]he Americans I encountered and read about were being forced to depend more and more on one another,” Partanen writes, “in a throwback to the traditional relationships of old.  And in the process, individuals were becoming beholden to their spouses, parents, children, colleagues, and bosses in ways that constrained their own liberty.”

For instance, Partanen grew disturbed by the grotesquerie of financial tax incentives to marry, and using marriage as a solution to poverty to compensate for lack of government support.  “[I]n Finland,” Partanen explains, “a policy like America’s would be considered government meddling in matters of private morality.”  To Partanen, promoting marriage—“one of the most precious of human experiences”—as a poverty fix “sounds like something from the distant past.”

Partanen explains that the Nordic welfare states arise from what she calls the “Nordic theory of love.”  This is the idea that love and fulsome relationships arise between individuals who are equal and autonomous.  Dependency is anathema to love.  This theory, Partanen explains, “has inspired the broad variety of policy choices in the Nordic nations that together ensure a single, predominant goal: independence, freedom, and opportunity for every member of society.”

These are quintessential American values.  But American fear of the welfare state has endangered them as increasingly hollow aspirations.  There is an odd contradiction in American life, Partanen writes: “Today the United States is at once a hypermodern society in its embrace of the contemporary free-market system, but an antiquarian society in leaving it to families and other community institutions to address the problem the system creates.”

Leaving it to families and others to fill in the gaping holes in our safety net can dampen relationships that ought to be sacred.  The dependency of the elderly on their children to act as caretakers, for instance, breeds resentment and exhaustion.  That’s why Nordic countries provide public eldercare centers.  Nordics, Partanen writes, “want their love for the elderly to remain untainted by the sort of resentments that can arise when aging parents are stuck in relationships of dependency with their own children—relationships that destroy the autonomy, independence, and freedom of everyone involved.”

This is true at the opposite end of life, too.  New parents must solve logistical puzzles to take time off from work to be home with their new child, and to coordinate childcare while staying in the labor force.  Those who are lucky have paid leave as a fringe benefit from their employers, but far from all have this luxury.  The Nordic theory, however, is that “parents should be able to focus on welcoming new life into the world and loving their newborn, rather than being overwhelmed by the logistical challenges involved,” Partanen writes.  That’s why Nordic countries each provide at least nine months of paid leave for new parents to stay home with their children.  And Nordic countries provide public daycare for working parents, sparing them the exhausted mental bandwidth that American parents expend figuring out how to juggle work and childcare.

The Nordic brand of freedom means the absence of burden.  Children don’t bear the burden of their parents’ income status—kids of all classes can access high-quality education and are entitled to a basic child allowance.  Workers aren’t stuck at a job for fear of losing health insurance—and employers aren’t burdened with running complicated social insurance schemes, either.  Entrepreneurs can put business ideas in practice, knowing that there’s a safety net to catch them if they fail, and that their startup won’t be tasked with paying for costly employee benefits.

Skeptics might argue that this freedom is merely replacing one dependency with another—making citizens dependent on government instead of on family, neighbors, civil society, and themselves.  Indeed, the prospect of government dependency has long been the bogeyman in American politics.  Why should Nordic dependency on the state be preferable to American informal dependency elsewhere?

Henrik Herggren, a Swedish public intellectual, has one answer.  In The Myth of the Nearly Perfect People, author Michael Booth deals with similar themes of Nordic freedom and personal independence, and poses the question of government dependency to Herggren.  According to Herggren:

“[Swedes] are not arguing that people are totally independent, because they are dependent on the state. [. . .] [But] [y]ou can get an awful lot of autonomy by accepting a democratic state is actually furnishing you with the means to be autonomous in this way, and reach a certain self-realization.  [. . .]  [T]he point here is not that the state is saying this is how you should live your life, but it is providing you with the support structure.  Society is unequal and people don’t have the same opportunities, but we are trying to lift everybody to the same level so they can achieve the same kind of freedom and self-realization, which only a small group could do previously.”

In Herggren’s view, the state can provide a support structure and a set of guideposts to create equal opportunity in a way that no other actor or institution can.  Any other arrangement of dependency—on families, on employers, on charities—will create varying and unpredictable levels of support.  Only the state can guarantee a basic level of opportunity to all, setting everyone on a path of self-exploration and meaningful freedom.

So what is to be done for the stressed-out and stretched-thin United States?  Partanen has a clear vision for what the country needs.  “What Americans need,” she writes, “so that they can stop struggling so hard to be superachievers, is simple: affordable high-quality health care, day care, education, living wages, and paid vacations.”  In short, real freedom requires government to step in to provide the goods needed to loosen the squeeze on everyday Americans.

Of course, Nordic citizens pay handsomely for these types of generous public services.  But as Partanen explains, when you tally up all of the United States’s public and private expenditures on items like health care, pensions, unemployment benefits, and childcare, it winds up spending as much as Sweden does as a share of its GDP.  Given the bounty that her tax bill bought, Partanen says, “it was a bargain.”

The United States is stuck in an outmoded, negative view of freedom.  This brand of freedom is negative in that it focuses solely on freedom from government infringement on personal liberty.  But modern society calls for a more positive understanding of freedom—a freedom from knowing that certain basic goods and services are accessible to fall back on in order to meaningfully actualize personal liberty.

“Today nations that have progressed into the twenty-first century see freedom as something much richer,” Partanen writes.  “They see freedom as the assurance that all individuals get real opportunity, so they’re free to pursue the good life for themselves, and real protection from the lottery of bad luck, so they’re free from unnecessary fear and anxiety.”

Let’s hope we join these nations soon.  Our incomplete idea of freedom is obscuring all of the ways that we are already unfree and dependent, constrained and burdened.  A modern and comprehensive welfare state is necessary to replace mounting American anxiety with real American freedom.