On Being Wrong About the Public Option

I made two predictions this summer that look like they're not going to turn out very well. One was saying that the unemployment rate wouldn't hit 10 percent (it hasn't yet, although it probably will) and the other was saying that the public option was "probably" dead.

That latter prediction, formally speaking, isn't wrong yet either. Although Harry Reid is endeavoring to insert a public option into the bill that the Senate will vote upon, that bill hasn't gone to the floor yet, nor has it been approved. Neither of these things are guaranteed: it looks like Reid still needs to round up a couple of Democratic votes to get to 60 on a motion to proceed with the bill, and that may not be easy (if Reid can't get them, you should expect him to pull the public option off the table, rather than losing face with a floor vote).

In addition, the public option that Reid hopes the Senate will vote upon is compromised in three distinct ways from the original vision of it. Firstly, states will have the right to "opt out" of it (not that big a deal, IMO). Secondly, it will be limited to negotiating its rates in the market, rather than charging Medicare rates (a very big deal). Thirdly, it will be open only to the relatively small handful of people who are eligible for the health insurance exchanges, rather than the whole country (ditto). The consensus -- and I agree with this -- is that Reid's version is still in its essence a "public option", but it's not the robust public option that progressives envisioned. For better or for worse, it really is a compromise, and a substantial compromise.

Nevertheless, we try to be accountable here, and it looks like this prediction will turn out to be wrong. So where did I -- and many other "pundits" -- miscalculate?

Last week, we discussed 10 ways in which the environment had become more favorable to the public option. But some of those -- like the favorable CBO score that the public option will get -- were foreseeable ahead of time. What, then, were the real surprises?

The first surprise is that Reid is showing some backbone. I don't think this move is quite as risky as it looks, because Reid has some wiggle room before he passes the point of no return. But Harry Reid does not generally have a reputation as a risk-taker, even in small doses. A nontrivial factor is that he's literally gone overnight from being a goat to a hero in the progressive blogger/activist community, something that could pay dividends when he's seeking cash and volunteers for what will be a very tough re-election campaign. Save perhaps for Alex Rodriguez, nobody has done more in the last month to resuscitate their image with their fan base.

The second surprise is that this happened without much explicit support from the White House.

The third surprise is the way that Democrats regrouped after the turmoil of August. The President's speech on September 9th was a major and -- in my opinion -- still somewhat underrated factor in this. But also: the tea party/town hall movement that dominated the headlines in August is at this stage somewhat immature, with a lot of sound and fury but not so much focus -- sort of where liberals were at in 2002/03 before the failures of the Bush administration became more manifest. Whereas liberal activists have been focused on a laser like the public option, conservative activists have been distracted by ACORN, Van Jones, the NFL's conspiracy against Rush Limbaugh, and who-knows-what. Usually it's liberals who have amorphous, omnibus critiques of the government, and conservatives who bear down on specific policies; the polarity seems somewhat to have reversed.

The fourth surprise, less important than the first three, is that the usually very footsure insurance lobby undermined its credibility by putting out the wrong study at the wrong time, giving a gift to Democrats by making it easier for centrist Senators to distance themselves from them.

The fifth surprise is that the usually very prepared Olympia Snowe didn't do her homework on triggers, failing to flesh out the proposal to the point where it was ready for a floor vote, much less had gained credibility with the Democratic caucus. If Snowe had done more legwork on the trigger -- at least theoretically, there are manifestations of it that ought to have been relatively acceptable to progressives -- then we'd almost certainly be talking about a "hard" trigger versus a "soft" trigger, instead of opt-ins versus opt-outs.

With all that said, again, it is not yet time for progressives to be breaking out the champagne. The momentum for the public option could unravel, and could conceivably even take the whole project of health care reform with it. And the public option, particularly in its compromised form, is less of a game-changer than either wing seems to think.

But none of this would have been possible without the yeoman effort of a relatively small number of bloggers and activists -- they know who they are -- who were tired of taking "no" for an answer. They wanted this fight because of the paradigm-shifting implications it could have for how business gets done in the Democratic Party. And, somewhat to my surprise, they're having it.