|What the Non-Political World Understands|
By Quin Hillyer
Wednesday, August 31 2011
Last week I spoke to a local Kiwanis club in Mobile, Alabama. Adapted for print, here’s what I told them.
Look, I lean pretty strongly to one side of the political debate. I think standing on principle is important. But there is something to be said for compromise, for making use in the political world of the ordinary diplomacies we use in everyday life.
Now, before I go any farther, let me be clear that compromise for compromise’s sake, and diplomacy just to keep a meaningless peace, are not goals devoutly to be desired. But there IS a time and a place for discarding hardball politics and political attacks, in order to find common ground.
In that light, consider some of today’s issues. Everybody is up in arms, of course, about the national debt, about pending bankruptcies of Medicare and Social Security within just a few short years and about unfairnesses in the tax code. And people are right to be upset. These are huge problems.
But the dirty little secret is that the solutions aren’t nearly as hard as the ideologues pretend. In the policy world, rather than the politician world, there is widespread agreement – probably majority agreement – on the basics of reform that would solve well over half of the problems I just mentioned.
On Medicare, the answer has been obvious since the late 1990s, even though congressional liberals flat-out refuse to acknowledge it. The answer was identified by a bipartisan commission on Medicare, appointed largely by Bill Clinton. The commission achieved a remarkable level of consensus. Its chairman was Louisiana Democratic Senator John Breaux. Its executive director was a young Louisiana whiz kid by the name of Bobby Jindal. You may have heard of him. He’s a lifelong Republican who now of course is governor of Louisiana.
Democratic Senator Bob Kerrey of Nebraska, another commission member, approved of the commission’s recommendations. And the main structural reform, even if not all the numbers and side provisions, also was supported by Laura D’Andrea Tyson, who had been chairman of Clinton’s Council of Economic Advisors.
Joining these Democrats, the commission Republicans were entirely supportive.
The main idea for reforming Medicare was called “premium support.” It means giving the money to patients to buy their own insurance, rather than sending the money through a complicated bureaucracy to make its way to doctors and hospitals on the basis of even-more complicated bureaucratic formulas.
It’s almost the exact system used as the central feature of what became the Medicare Part D prescription drug program. Now I still don’t think we should have passed Part D, creating an expensive new entitlement, without greater reforms to Medicare as a whole. But it is crucial to understand that this central feature of Part D has been a remarkable success. The 10-year cost of the program to the taxpayers has come in at more than 30% cheaper, saving several hundred billion dollars in ten-year costs, than the original estimates.
And the cost of premiums for individual seniors also has been well under, as much as 40 percent less, than had been projected.
The reason it works is because it lets people make their own choices rather than letting bureaucratic rules and perverse incentives run the system. It works because it makes providers actually compete for business, and gives them incentives to do so.
In other words, it encourages free market competition. And market competition works.
Moderate to center-left Democrats accepted that wisdom in the late 1990s. But something got in the way. Just as the commission was appointed, the Lewinsky scandal broke. Just as the commission finished its work a year later, both sides were licking their wounds and Bill Clinton owed the hard-liners in his party for supporting him through the ordeal.
The hard-line liberals oppose free market competition. Clinton owed them. So he killed the proposal of his own bipartisan commission. Ever since then, Democrats have shied away from the idea. If it wasn’t even good enough for the moderate Bill Clinton, apparently went the thinking, then clearly it couldn’t be trusted. Or something like that.
But honest center-left people, and center-left think tank people, and anybody who honestly looks at how well Medicare Part D has worked, will acknowledge that premium support is the way to go. It’s also, in effect, the system used in welfare reform in 1996, which worked like a charm to turn Aid to Families with Dependent Children into a workfare program that cut welfare rolls in half and cut poverty levels by a huge amount.
And premium support, the proposal with a bipartisan provenance, supported by Democratic senators Breaux and Kerrey, is at the very heart of the Medicare part of the budget proposal by House Budget Committee Chairman Paul Ryan of Wisconsin. Nancy Pelosi attacks the idea as if it is as scary as burning seniors at the stake. But how scary could it be if so many Democrats once embraced it?
The same is true on all sorts of other issues. There’s no reason why Medicare’s eligibility age can’t be raised so that it tracks that of Social Security once again, meaning that over 20 years it will ever-so-slowly rise from 65 to 67. There’s no reason why a tiny change can’t be made, government-wide, in the formula the feds use to calculate cost-of-living adjustments for entitlements and taxes. There’s no reason why federal domestic spending can’t be frozen, hard, for one year, and then capped for another two years, considering that it has already risen something like 40 percent in just the last three years.
And there’s no reason for corporate and individual tax rates NOT to be lowered, while loopholes and a few special-interest tax breaks are closed or ended.
I won’t go on with all sorts of mind-numbing detail. The point is, there are plenty of ideas out there that actually enjoy widespread support among policy experts of otherwise different political philosophies. If we put aside the posturing, we really could get something done.
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