Rumors of the Demise of ObamaCare Have Been Greatly Exaggerated

The beltway consesnsus seems to be that the Democrats' prospects of passing meaningful health insurance reform this year have become much slimmer, if they haven't already entirely evaporated. Like Ezra Klein, however, I'm not really sure what everyone was expecting. There is a lot of money -- and political capital -- at stake here. Were opponents of health care reform going to roll over and play dead? Has anything proceeded that differently from how we might have expected it to proceed ahead of time?

Over at Intrade, the bettors currently assign a 43 percent chance that a health care bill with a public option will be passed by the end of the year. There is no market, unfortunately, on the prospects for passage of a bill without a public option (something which could still happen under any number of scenarios). What's interesting about this contract, though, is that it's not particularly higher or lower than it has ever been. Sure, health care has had a bit of a rough go of things of late, but perhaps not a particularly rougher go than we should have been "pricing in" to our expectations:



I had argued previously that Obama should have done more to frame the debate and put a particular health care bill in front of Congress, rather than letting Congress handle it themselves. Maybe health care would be in a little bit better shape right now if he had done that and maybe it wouldn't; we'll never really be able to test the counterfactual. But because he didn't do that, Obama still has most of his tactical flexibility intact. And there are at least four scenarios under which health care reform could still pass this year:

1. Whip Democrats Into Submission. This is probably the closest thing to the default approach. So long as there are a dozen or a half-dozen different iterations of health care floating around Capitol Hill, individual Democratic Congressmen can afford to bargain for their preferred version. "Progressive" Democrats from rich districts can object to the plan of raising taxes on the very wealthy to pay for expanded coverage. Labor-backed Democrats can try and play hardball on any proposal to remove the benefits tax exemption. The Blue Dogs can howl at the moon for whatever it is they want -- probably some kind of sweeteners for rural districts, like the ones given to farm-state Democrats on the climate bill. And advocates of the public option can continue to treat it as a sine qua non and threaten to oppose any bill that doesn't include one.

Once a particular bill is put up to a vote, however, the overwhelming majority of Democrats are going to have a difficult time voting against it. Health care reform remains quite popular in theory and at least marginally popular in practice. It will probably do the most good for those districts where conservative Democrats tend to reside.

And then there is the oldest motivator of all: survival. The failure of health care reform in 1994 may have damaged Bill Clinton -- but it really damaged the Congressional Democrats, who lost 54 seats in the House and another 8 in the Senate. Of the 36 incumbent Democrats who lost that year, only four (North Carolina's David Price, Ohio's Ted Strickland and Washington's Maria Cantwell and Jay Inslee) would ever return to the Congress (whereas Clinton, of course, was re-elected). Any Democrat who votes against health care, moreover, can expect to be permanently shut off from the Obama-run DNC and from most or all grassroots fundraising drives, and many of them can probably expect a primary challenger.

There are probably some Democrats who would be better off if health care went away. But once it comes up to vote, I'd imagine there will be very few who are actually better off voting against it.

2. Reconciliation. This is not necessarily mutually exclusive with the other scenarios, but Obama could try and use the reconciliation process to pass health care, which would mean Republicans would lose the ability to filibuster in the Senate and Democrats would need only need 50 votes for passage. This is risky: the extent to which the bill remained intact would depend upon the rulings of the obscure Senate Parliamentarian, and going through reconciliation would cause mayhem on the Hill with somewhat unpredictable political consequences. And it would certainly look overtly partisan -- especially now that Democrats have gained their 59th and 60th seats in the Senate. But if Obama decides that health care is too big to fail, reconciliation is an option.

3. Wyden-Bennett and Other "Bipartisan" Approaches.. I don't see any particular reason why the Administration couldn't press the reset button and push for a different sort of health care bill -- particularly Ron Wyden's, which already has a half-dozen Republican supporters. In fact, it might make Obama look somewhat good to "acknowledge the political realities" (yadda yadda) and adopt a more "bipartisan" approach. A lot of Republicans claim to support health care -- just not the particular approach being put forth by the Democratic Congress. Shifting gears, particularly to a bill like Wyden-Bennett that is strong on cost containment, would reveal many of them to be hypocrites, but probably also secure enough of their votes to make passage a likelihood.

4. Hope the Economy Gets Better (or Some Other Secular Change in Momentum). In general, I'm pessimistic about the state of the economy insofar as it will affect Obama's political capital. Even if the economy formally pulls out of a recession -- some economists think we're already out of the recession -- it will take some time before the employment picture turns around. The past week, however, has brought some relatively good economic news and the Dow is now hovering at about 8,800 points, around its 6-month highs. If the next monthly jobs report is better than expected, if the Dow somehow rallies past 10,000, or if the recession is declared over, that might give Obama a little bit of actual momentum which may be amplified by the Washington press corps, which by that point will have tired of the "Obama is melting!" storyline and may be looking to describe his "comeback" instead.

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I'm not about to go out on a limb with some sort of prediction that health care is going to pass this year. It could very easily fail. But it's not going to fail without the White House fighting like mad for it, and with most or all of its options being exhausted. The fundamental weakness of the White House press corps is that they can rarely see beyond the current 24-hour news cycle -- there are still a lot of news cycles ahead before ObamaCare can be put to rest.