Last Helicopter Out of Saigon!

In popular psychiatry, a classic passive aggressive gambit is “malicious compliance”- intentionally inflicting harm on someone by strictly following a directive, even though the person knows that they are damaging someone by doing so. In Washington, the most skilled practitioner of this dark art is Speaker Nancy Pelosi If health reform craters, Pelosi will disingenuously claim that she did precisely what the President asked of her, and blame the Senate and the President for its failure.

In reality, Pelosi’s “leadership” almost fatally wounded health reform last summer. If the process does collapse, the blame should fall squarely on her shoulders. Her poor political judgment led directly not only to squandering a nearly 80 vote majority, but also exposed embarrassing and ill-timed disunity among Democrats on a signature domestic policy issue. It won’t be the Republicans that killed health reform, but incompetent Democratic Congressional leadership.

Last July 14, Speaker Pelosi unveiled the opening bid in the health reform process- HR 3200, America’s Affordable Health Choices Act of 2009. This bill was drafted largely without input from their Republican colleagues or from important Democratic moderates. It also put into legislative language virtually exactly what the President promised in his campaign, without considering seriously the political implications for the actual passage of the legislation- a political form of malicious compliance. Democratic moderates felt their input had been ignored and they were immediately trapped on the wrong side of this issue.

HR3200 had an immediate polarizing effect on the health reform debate, and the damage control process was on. In a sense, health reform has never recovered. Pelosi’s bill summoned the right wing talk radio demons (and the inimitable Betsy McCaughey) out of their caves, reviving long dormant rhetoric about a “government takeover of the health system”. This label has clung stubbornly to all subsequent versions of the legislation.

Unfortunately, the critics weren’t too far wrong. HR 3200 effectively federalized the employer health benefit. It mandated that employers offer a “one size fits everyone” health benefit to their workers, the benefit precisely defined by federal statute. It imposed an 8% payroll tax on employers who did not provide the benefit, pushing their federal payroll tax to 23% if you include Social Security and Medicare. It also moved the top tax rate for federal income taxes for businesses filing as “subchapter S” to 46%, a level not seen since Jimmy Carter was in the White House.

Given unemployment was climbing toward 10% at the time, HR3200 would have simultaneously diminished corporate cash flow and increased the cost of hiring new workers for firms that did not presently offer health coverage- a recipe for no recovery.

HR 3200 created new health insurance premium subsidy for workers covering and estimated 20 million new people, but without any meaningful brake on future federal subsidies. To enroll these new folk, however, health insurers would have to comply with provisions of a new federal health insurance exchange, whose rules would have effectively ended medical underwriting.

The health coverage gated through the exchange was no longer be “insurance”, but a federally defined health care entitlement financed largely by employers. The bill also created a public health insurance option, which had the effect simultaneously of competing with and financially undermining private health insurers. All of this was to be overseen by a politically appointed Health Choices Commissioner, in effect, a commissar for the health insurance system. This nominally private-sector approach had a distinctly Soviet flavor.

Almost immediately upon HR3200’s release and for the following seven months, the Democrats have been playing defense on health reform and losing. Democrats elected from Red or Purple states ran from the bill as fast as their legs would carry them. They rebelled against the “public option”, the employer mandates, as well as the tax increases required to fund the premium subsidies.

Moderate Democrats also objected to subsidizing private coverage of abortions and to any enrollment of people in the US illegally (roughly 7-8 million of the uninsured). It might have been possible to address these concerns “privately”, e.g. in the initial drafting process, but by the time HR 3200 was released, many After almost four months of contentious negotiations, a revised version of the House bill passed by only five votes, one of which came from a stray Republican.

By the time Democratic moderate concerns had been clumsily and publicly accommodated (in the late fall), the resulting House bill had gravely offended three core constituencies of the Democratic party- women, Hispanics and the single-payer advocates, without materially addressing the critics of a huge expansion of federal power (and spending). The Democratic base lost enthusiasm for the bill while Democratic moderates continued to struggle with the “government takeover” label. By late fall, the legislation had acquired the odor and toxic sheen of a rotten side of tuna.

In the court of public opinion, the ensuing seven months (with a brief blip after Labor Day after a well- crafted Obama defense of health reform), were all down hill for health reform. Opposition to the process, as much as the substance, of health reform hardened, aided materially by a flurry of dealing making around the Senate bill (Medicare or Medicaid carve outs for Florida, Louisiana and Nebraska most visibly).

The late January loss of Ted Kennedy’s seat to an insurgent “Tea Party” Republican, Scott Brown, was an unmistakable warning sign that even formerly unassailable Blue State Democrats were now at risk. Political pundit Charlie Cook, who follows the Congressional races at a microscopic level, wrote recently that the Democrats have been in free fall since August. They lost gubernatorial races in New Jersey and Virginia, county executive races in solidly Democratic Fairfax County (VA) and Westchester and Nassau Counties (NY). A surge of inconvenient scandals- David Paterson, Charles Rangel and Eric Massa- all in New York- have further tarnished Democratic credibility. Cook placed the odds on the Democrats losing the House this November at 50-50 and sliding.

On the eve of the Presidential health reform “summit”, a Newsweek poll revealed that independent voters, crucial to re-election of Democratic moderates, opposed passage of health reform by a stunning 62-29% margin. Despite the White House’s feeling that the President could paint the Republicans into a corner and blame them for halting health reform, a Politico.com reader poll after the summit suggested the Republicans decisively outpointed the President (52%-19%) by stressing the fiscal and economic risks of the bill. There aren’t a lot of undecided voters left on the health reform issue- and strongly “anti-” sentiment outruns strongly “pro-” sentiment by almost two to one.

Now the White House and Democratic leaders are in the final scramble to find votes to send the President something he can sign and declare this endless and divisive process over. Speaker Pelosi suggested last week that, regardless of the damage they may suffer at the polls in November, House Democrats owe her and the President a reaffirmation of their support. Pelosi basically ordered her troops to swallow their reservations about this bill and fall on their swords.

Gloria Borger of CNN reported late last week that a “senior White House aide” characterized the coming vote on health reform as “the last helicopter out of Saigon”, the most unfortunate political metaphor of the Obama era thusfar. (For younger people, that helicopter was ferrying South Vietnamese collaborators with the United States off the roof of the CIA compound before the North Vietnamese Army flooded into Saigon). What did the “senior White House aide” mean? That the Communists are coming and congressional Democrats need to save themselves and run for the hills? It sure doesn’t sound like a clarion call to do the right legislative thing.

It isn’t the Communists that are coming. It’s a lynch mob. And the angry horde is going to discriminate between “progressives” and moderates. They are simply going to find and hang as many public officials as they can get their hands on – incumbent Congresspeople, Senators, Governors, state legislators, county executives. Unfortunately for the Democrats, the majority of those incumbents are Democrats. I’ve not seen such a toxic electoral atmosphere in my lifetime.

If she cannot find the votes to pass health reform, Speaker Pelosi will be deflecting blame and knifing her White House colleagues in the back all the way to the guillotine. If it passes, it will be in spite of, rather than because of, her advocacy. By maliciously complying with the President’s mandate, Speaker Pelosi and her arrogant, tone-deaf management of the legislative process badly damaged the prospect for lasting health reform. She should scramble for a seat on that last helicopter herself.

Originally published on The Health Care Blog.