Wednesday, March 24, 2010

Is ObamaCare a Political Tipping Point?

High-stakes political contests have a distinctive psychological dimension. They excite extraordinary ideological passions not just because the contestants disagree pointedly about a particular public policy issue, but because they agree that resolving the issue one way or the other will bring us to a political tipping point. To those trying to remake the status quo, losing means squandering a rare, and possibly the last, opportunity to right a grievous political wrong. To their political opponents, losing means surrendering to a political change they think is irreversible and profoundly for the worse. Both sides throw everything into the fight because they’re sure that they’ll never be able to recover lost ground.

The enactment of ObamaCare is a case in point. Liberals are congratulating themselves for seizing what might have been their last chance to redeem the egalitarian promises of the New Deal and the Great Society. Conservatives are checking the fine print on what they fear is a one-way ticket to European Social Democracy.  Here’s Matthew Yglesias expressing a view shared by lots of jubilant liberals and despondent conservatives (my emphasis):

“For the past 65-70 years—and especially for the past 30 years since the end of the civil rights argument—American politics has been dominated by controversy over the size and scope of the welfare state. Today, that argument is largely over with liberals having largely won. . . . Due to the bill’s almost comically delayed implementation, for several years we’re still going to have a lot of political tussling over it. And even once it’s in place, the system will continue to be debated and tweaked for years to come. But over time, I think American politics will come to look quite different and we’ll look back on this day as a turning point.
When Yglesias says that liberals have “largely won” the argument over the “size and scope of the welfare state” he’s speaking metaphorically. He doesn't need to be told that all conservatives and, if you believe the polls, a substantial majority of likely voters still prefer that ObamaCare not pass, and that a substantial number of them can be expected to prefer for the foreseeable future that it be repealed. “Winning the argument” isn’t a matter of changing minds about ObamaCare—if anything the process of passing it hardened opposition—but of creating political circumstances under which it’s extremely unlikely to be repealed or eviscerated by subsequent acts of Congress.  If that’s true it must be because: (1) the political system will not respond to the anti-ObamaCare preferences that still exist; and/or (2) many people will soon stop having those preferences. How confident should we be that either of these propositions is true?

On their face, both propositions are supported by conventional wisdom that holds that new entitlements tend to expand rather than be rolled back because powerful political constituencies invariably organize around them. On this view, that’s why ObamaCare’s once-controversial precursors, Social Security and Medicare, have become politically untouchable.

Yet there are crucial respects in which the political parallels between ObamaCare, on the one hand, and Social Security and Medicare, on the other, break down. The latter reforms gave rise to seniors as a well-organized and politically active constituency that would soon be swaying elections in pivotal election districts when anyone even thought about rolling back old-age benefits. Moreover, Social Security and Medicare never generated a readily organizable counter-constituency because they spread a modest financial burden across the entire population of working age people, many of whom thought that it was a pretty good deal because it relieved them of the social obligation of providing privately for their own parents. By the time unfunded Social Security and Medicare liabilities threatened to crowd out other highly valued public objectives, seniors were politically formidable enough to stand up to the political opposition.

The principal beneficiaries of ObamaCare are either people who now want but can’t get health insurance or people with an overriding fear that they’ll lose the insurance they have. That’s a shifting population that’s much harder to organize politically than seniors because its size and composition vary according to the state of the employment market. It’s not nearly as likely to stand up to the easier-to-organize constituencies that will have to subsidize other people’s health insurance by paying higher taxes and having their choices restricted in the health insurance market—including seniors who fear that the Medicare cuts that partially finance ObamaCare will restrict their access to, and quality of, medical care.

What’s more, ObamaCare is bound to be more socially divisive than Social Security and Medicare. The latter programs redistribute resources and opportunities among generations. The working-age people now footing the bill expect one day to be the beneficiaries of younger people’s contributions. ObamaCare redistributes enough resources within generations to generate resentment among the people paying for the subsidies because most of them assume (sometimes unreasonably) that they'll never need subsidies themselves.

In these respects ObamaCare is more politically analogous to welfare than to either Social Security or Medicare. We all remember what happened to welfare entitlements in the 1990s.

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