Sympathy for the Liberals

David Frum

How awful to be a liberal Democrat these days!

You give money, volunteer time, work through the primaries. You win the first big Democratic presidential victory since 1964, you gain seats in both houses of Congress—including, ultimately, a 60-seat filibuster-proof majority in the Senate. Everything seems set for the achievement of the great policy ambition of your life: universal health care.

The president calls for it. The relevant House committees draft it. And then the Senate, your 60-seat Senate, crumples it up, throws it away, and replaces it with a bill seemingly designed to appeal to Republicans instead.

In fairness, the Senate is producing two bills. The Committee on Health, Education, Labor and Pensions, chaired by the ailing Ted Kennedy, produced a bill earlier in July that bore a strong similarity to the liberal House bill: tight regulation of insurers, a mandate on employers, higher taxes, etc. But everybody knows the action is at the Senate Finance Committee, which is chaired by Max Baucus from the more conservative state of Montana.

If reports on the committee's negotiations are reliable, then Baucus and his colleagues are tossing aside one Democratic aspiration after another. No government-run public plan to compete with private insurers. No national health exchange to allow the self-employed to buy insurance with before-tax dollars. No employer mandate to provide insurance. No tax on most businesses. Reduced subsidies to middle-income families.

Instead of a grand new program, the Senate Finance Committee is designing a modest incremental step.

Maybe that is the way it should be. The health-care system is a very complicated mechanism, and grand, sudden reinventions are likely to yield large, unintended consequences.

And yet, what the Senate Finance Committee is really proposing is caution in lieu of action. Many of the reforms it is discarding are precisely those most urgently needed and pragmatically engineered, including shifting Medicare reimbursement from payment per service to payment by the case. Health -are exchanges are an idea that the Heritage Foundation helped then-Gov. Mitt Romney test in Massachusetts, which resulted in an increase in the (already high) number of residents insured to 97 percent.

The Finance plan seems to respond to three supreme imperatives: spend less money (good); protect the existing system of employer-provided coverage (not so good); and leave Medicare alone (bad). While the plan that follows from those imperatives is gratifyingly minimal from a Republican point of view (and appealingly protective of the powerful senior citizen constituency), it does not actually accomplish very much that even conservatives would want. Above all, it offers no hope for a surcease of the health-care cost inflation that is breaking small businesses across the country.

The single strongest advocate I know of a single-payer, government-run health-care plan is a small-business-owner friend. She runs a company in a knowledge industry, and her employees are her greatest asset. She must provide health-insurance coverage, or they will quit. But the cost of her coverage has more than doubled since 2001. If she were offered an escape from this crushing burden, she'd gladly pay a tax of 6 percent, even 8 percent, of payroll. And she's a Republican.

But who is listening to her? Henry Waxman's overly ideological opening bid in the House, the Republican senators' eagerness to inflict a "Waterloo" on a powerful president, and the accident that the most powerful Democrat on the issue represents a red state—all have combined to produce a gigantic and expensive whiffle.

And from a Democratic point of view—yikes!—what a crushing disappointment. As the punch line of the old Soviet joke posed: "For this you made a revolution?"