Of eggheads and good eggs

I have not written much about prospective new federal health care insurance legislation in many months as my position on it has remained essentially unchanged since the summer (it’s a bad idea). Some might find this close-minded, as the legislation currently evolving in the halls of Congress is different in scope and substance than the discussions from this past summer, but I don’t see that my approach is close-minded at all.

Many smart folks, better informed than myself, have done the heavy lifting of reading through thousands of pages of draft legislation (now over 2,000 pages in Senator Reid’s bill alone). Principally, the Congressional Budget Office (CBO) has issued a report on how the various bills and provisions will affect the federal budget and has concluded that the 2,000 pages of legislation will be “budget positive,” that is, extending health care insurance to 30 million or so people under the Reid plan will actually save money.

But here’s the rub: in order for the bill to be budget positive, this 2,000-page monster will have to be followed, without subsequent revision, to the letter. Raise your hand if you see that happening. Achieving this over the CBO’s ten-year budget window would be difficult enough, and even the CBO acknowledges that to venture a guess beyond 2019 is pure insanity. The CBO director Douglas W. Elmendorf has written as much on his blog, saying, “These longer-term calculations assume that the provisions are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation.” The director even casts doubt on his agency’s work within the ten-year window, saying that its estimate “is subject to substantial uncertainty.”

This state of affairs is Reason #1 that I can’t support current health-care reform measures. There are some very good ideas inside the various plans, but taken whole, the Reid bill swings the door wide open to future financial oblivion by committing American taxpayers to large unfunded liabilities. As I asked back during the summer, “Why on earth would we put the most profligate branch of government in charge of the most expensive entitlement program in American history?” This is also why my position – and rather inflexibly so – is that Congress must establish a sound record of cost-cutting in the health care arena before I could ever dream of sanctioning greater government participation in health care insurance. And it’s not as if the fat isn’t there to be cut…Medicare by itself is probably the most wasteful government program on record. Reforming Medicare doesn’t require Senator Reid’s vastly re-imagined marketplace for health care, just a little political will and discipline.

The reason I have tuned out the health-care debate and might appear close-minded is because there is nothing that Congress can do in 2009 to satisfy this condition…except, that is, take out its scalpel and start cutting costs without adding further to the nation’s future unfunded liabilities.

Opponents will argue – and do – that that is precisely what the Reid bill attempts to achieve. Take the Washington Post’s Ezra Klein. He believes David Broder, his colleague at the Post, is being not just thick-headed but disingenuous in suggesting that Congress will never abide by the Reid bill’s constraints, that if you would just take the bill’s arithmetic at face value, we will save money in the long run following Harry’s plan, or as he puts it:

“In other words, the revenue and the savings grow more quickly than the costs. Extend that line out further and, yes, federal spending on health care falls as a result of this bill. In other words, the bill satisfies Broder's conditions. But he doesn't come out and say that.

“Instead, he pivots to the now-traditional argument that Congress won’t be able to stick to the savings and revenue measures in this bill.”

Mr. Broder’s argument – really less an argument and more the application of common sense – is “now-traditional” because it is so patently obvious. Klein slams Broder for not having much evidence for his perspective on the Reid bill, but it seems pretty clear that today’s runaway health care costs and the dire condition of the nation’s finances suffice as Exhibits A and B. Simply put, you don’t “reform” institutions into being more accountable and responsible by giving them ever-greater accountability and responsibility. Concerned taxpayers aren’t asking anything more of Congress than they might ask of their financial planners. After all, you typically require some proof of financial acumen before handing over large sums of money and responsibility to another person. Congress has offered no proof of its acumen at all, certainly not in my lifetime. Mr. Broder might be guilty of rattling on about policy details he has little personal knowledge of, but to label him a hack journalist for giving voice to the fears many Americans share is sickeningly elitist.

The real conflict that I perceive – at least, among the chattering classes – vis-à-vis the health care insurance debate is between what I would call the Good Eggs and the Eggheads. A commenter over at the Capital Gains and Games blog alluded to a split that I think is important here, writing that “Broder is representative of a lot of folks (pundits, pontificators and et.al.) who have a wide appreciation of the talk and a shallow grasp of the analysis,” that is, Broder knows what a lot people have said and are saying about health care, but doesn’t have the chops or inclination to submit the bills to rigorous analysis. There is a kernel of truth here. I myself would not have the skill or patience to wade through 2,000 pages of Mr. Reid’s plan. Few people do.

But our intrepid commenter, I think, underestimates “talk.” Talk is not merely conversation points loosely modeled on an underlying policy, but the very real machinations of people figuring out their own self-interests. It goes beyond what is proposed in a bill’s language (something highly conditional at best), taking account of the “soft” data that most people use to live their lives. This includes things like a government’s track record in delivering on promises, a politician’s integrity in calling things as they see them, and an individual’s perceived risk in changing from the status quo to something uncertain. These machinations are inexact and highly susceptible to being manipulated by clever people, but they are – like it or not – the bedrock foundation of democracy. Yes, having the Eggheads around to tell us what a bill might augur – under certain circumstances, given certain conditions – should be valuable inputs to decision-making, but hard data, particularly when Washington is involved, counts for a good deal less than the Eggheads would have it. The Eggheads see the abstractions sketched out on a sheet of paper and wonder why oh why the rest of us can’t appreciate them. The Good Eggs stare at the Eggheads, bemused at the credulity of such smart people.

[HT: Brad DeLong for pointing to some of the material alluded to above]