The Public Option's Last Stand

Senate liberals are rallying around the dead letter of the health-care reform bill. Matthew Yglesias on why it’s likely too little, too late—and the Obama strategy that could have worked.

02.20.10 7:03 PM ET

The public health-insurance option—a hypothetical element of comprehensive health reform much-beloved by liberals, much-discussed last fall, and pronounced dead back in December—is once again showing signs of life. The cause, ironically, is the very same Scott Brown electoral victory that’s put the overall concept of comprehensive health-care reform on life support. And the method at hand is very unlikely to work. It does, however, point to the fact that the Democratic leadership is finally figuring out how to get things done in Washington. Unfortunately, it may be too late.

The reason the public option may ride again is that though both the House and the Senate have passed health-care bills, the bills are not identical. To become law, the two chambers need to iron out a compromise bill and then the House and Senate each need to vote on it again. But with Democrats down to “only” 59 Senators, the Senate can’t pass a new bill over the objections of the Republican minority. Consequently, if health care does get done, the way it will happen is that the House will pass the Senate bill word-for-word and then both houses of Congress will pass a “sidecar” package of amendments via the budget reconciliation process, which allows for 50 senators plus the vice president to pass laws.

The right strategy would have been to play legislative hardball from a position of strength. If Obama had come out of the gate saying he was looking to assemble 50 votes for a reconciliation bill, the whole dynamic would have been different.

Now recall that the reason the public option was dropped in the first place was to secure the support of Joe Lieberman (I-CT) and Ben Nelson (D-NE) for the health-care reform package. Reconciliation, however, not only lets Democrats overcome a Republican filibuster, it also makes it possible for Democrats to lose as many as nine members of their own caucus. Consequently, activists centered around the Progressive Change Committee are pressing senators to sign on to a letter saying they would favor including the creation of a public option in any reconciliation package.

Matthew Yglesias: The Public Option’s Last StandRealistically, this seems unlikely to happen. Nelson and Lieberman were the formal sticking points on the public-option point last year, but a number of other red-state senators—Mary Landrieu, Blanche Lincoln, Mark Pryor, Evan Bayh—seemed to be opposed as well. Worse, key legislative leaders like Finance Committee Chairman Max Baucus and Budget Committee Chairman Kent Conrad have also seemed consistently skeptical about the public option. Their lack of enthusiasm is particularly problematic because a key Republican tactic will be to argue that the use of reconciliation in the health-care context is illegitimate. The argument is nonsense but it gets a fair amount of play in the press. And for most Democratic senators, the key to countering those arguments will be to have the relevant committee chairs on board for whatever they decide to do.

With Democrats extremely nervous about the health-care issue generally, most seem unlikely to want to reopen the fundamental elements of the pre-Brown deal for renegotiation. Folks on the Hill want health care off their plates, which means either pronouncing the whole thing dead quickly, or else proceeding with a sidecar quickly. A new fuss over the public option would necessarily return health care to the front-burner and chew up a bunch of time.

Still, you have to admit that the public-option revival could work. Many Democrats, including Conrad and Baucus, tended to express doubts about the public option in a distinctly “meta” way—saying they opposed it out of a pragmatic desire to get 60 votes. But with the threshold lowered to 50, the vote count looks quite different. Indeed, if those two were genuinely pragmatic about it and said they’d be happy to jump on to a public-option proposal, then it might not be all that hard to round up the 50 votes. And such a move would have considerable benefits. Progressives have tended to overstate the importance of the public option, but it is a good idea that would make health reform better. What’s more, there are some issues—like the desirability of financing reform through an excise tax on high-cost insurance plans—where centrist legislators are right on the merits and their more left-wing opponents are wrong. Giving the left what they want on the public option might make them more willing to accept the centrist view on the tax issue. From a policy point of view, that would be win-win.

The real issue, however, is that it’s almost certainly too late for a reconciliation strategy to have its strongest possible impact. Everyone knows at this point that the Democrats are reaching for a majoritarian process out of what amounts to desperation—Obama’s secured no Republican support for his plan, his job-approval rating has slipped from the mid-60s to around 50-50, and some prognosticators have pronounced the entire reform effort dead. The right strategy would have been to play legislative hardball from a position of strength. If Obama had come out of the gate saying he was looking to assemble 50 votes for a reconciliation bill, the whole dynamic would have been different. The combination of post-election honeymoon and a 50-vote threshold would have made passage of a bill look all but inevitable. Individual Democratic senators, knowing that their votes weren’t strictly necessary, would have had reduced bargaining power and wouldn’t have been able to hold the bill hostage to their idiosyncratic demands. That way, the bill never would have gotten larded down with things like Ben Nelson’s “Cornhusker kickback.” And since the GOP clearly wouldn’t have had the votes to block a bill, moderate Republicans might have actually had some incentive to come to the table and try to strike a deal.

Indeed, a strategy of hardball from the starting gate would have stood a pretty good chance of securing the votes for a public option. A reconciliation process launched now, by contrast, still stands some chance of delivering one—but realistically, the clock is likely to run out too soon, leaving liberals to ponder what might have been and to wonder why the administration was such a late convert to the idea of moving legislative priorities through the express lane.

Matthew Yglesias is a fellow at the Center for American Progress Action Fund. He is the author of Heads in the Sand: How the Republicans Screw Up Foreign Policy and Foreign Policy Screws Up the Democrats.