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By Jay Cost

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The Baucus Sausage

So, the CBO score of the Baucus bill has the mainstream media declaring this a victory for the Democrats' health care efforts. The New York Times leads the way:

Health Care Bill Gets Green Light in Cost Analysis

The Senate Finance Committee legislation to revamp the health care system would provide coverage to 29 million uninsured Americans but would still pare future federal deficits by slowing the growth of spending on medical care, the nonpartisan Congressional Budget Office said Wednesday....

Democrats rejoiced. Several wavering Democrats and one Republican, Senator Olympia J. Snowe of Maine, had said they would be influenced by the budget office report.

Is this a win? Perhaps, depending upon your perspective. If the goal is to win a news cycle, advancing the preferred narrative about the inevitability of legislative success, then yes. It's definitely a win. Since the mainstream media rules the news cycle, it's no surprise that it is partial to that view, and would count it a victory as the Times does.

But dig a little deeper and you'll notice a peculiar phenomenon. If there was to be an up-or-down vote on the Baucus bill, my guess is that it would be defeated by a left-right coalition. I base that conclusion on a perusal of the progressive and conservative blogs, which generally consider the Baucus bill to be horrible. So, in terms of actually finding a solution to the nation's health care problems, I'd say no. It's not much of a win.

Let's drill this down a bit. This is Jon Walker from FireDogLake:

Leave aside the lack of a public option and the fact that the weak exchanges are probably unworkable. And, for now, let's ignore the poorly designed regulator framework and the huge give away to PhRMA. (I know, big stuff to leave aside). Let's just look at Baucus's bill from 10,000 feet.

For starters, being "covered" under Baucus's reform really is no guaranty of financial security. The yearly cap on out-of-pocket expenses for a family is $11,900 (and that is not counting the cost of premiums, which could be double that). How many middle income families have the financial reserves to take that kind of hit if a spouse needs serious medical treatments over the course of a few years? This bill would reduce--but will not end--one of the greatest shames in our nation. That of "under-insured" Americans forced into medical bankruptcy.

The other major problem is that there is no major reduction in the number of uninsured until 2014. It will be roughly 44 months after the bill is signed before we start seeing a noticeable reduction in the number of uninsured. There is not one but two elections before anything really gets started. Looking closely at the new CBO report, it won't be until 2014 or 2015 that we start seeing a serious reduction in the number of uninsured.

Even after the bill is in full swing, around 2015, the number of uninsured who will be "covered" is only 27-29 million. Even after reform is fully implemented their will still be 24-25 million people in this country without health insurance, a full 9% of our population. Ignoring undocumented immigrants you are still talking about 17 million Americans without health insurance. This bill will not produce universal health care. It will not even produce near universal health care. After this bill goes into effect we will need another almost equally massive reform effort if we want to get to universal health coverage.

Walker's piece is entitled: "Baucus Health Care Bill: In a Word, Awful." It's pretty clear why he thinks that. The Baucus bill simply is not doing enough to keep costs down for the average American family. It also fails to expand coverage far enough. Walker also seems concerned that future Congresses will have an opportunity to tinker with the bill without affecting anybody's actual coverage because of the delayed start. He is right to list this as a worry: each Congress is sovereign and cannot be bound by the actions of a past one.

Walker's piece also hints at a point I have made before: many on the left hate the idea of an individual mandate without a public option. Progressives see that as a big sloppy kiss to the insurance and pharmaceutical industries. This is why Obama's continued insistence that the public option is only one factor has generally been ignored...by both sides.

Lest we think that the progressive bloggers do not have representation on these points in the Congress itself, here is Anthony Weiner's response to the bill:

"There's no public option, since there's no real cost containment in the Baucus bill," Rep. Anthony Weiner (D-N.Y.) told MSNBC. "So frankly that big problem goes un-addressed which is why the bill probably won't be taken very seriously from here on out."

Now let's tune to the right side of the dial. What do we hear? Complaints about the huge, hidden costs of the Baucus bill that conservatives think will ultimately hit the average American square in the jaw. Keith Hennessey rips the Baucus plan a new one. Among his many critiques, he points out that there is a strong likelihood that - claims of deficit reduction aside - the bill will increase the costs of total health care spending in the United States. So much for bending the cost curve. Hennessey also points out that the bill would create an indefensible inequality: those who receive their insurance from private companies would end up receiving smaller subsidies than those who get their insurance through the exchanges. He goes on to suggest that this would create perverse incentives for individuals and employers.

Over at National Review, James Capretta argues that the Baucus bill is full of gimmicks, essentially "shoehorn(ing) a $1.5 to $2.0 trillion "universal coverage" scheme into an $830 billion sack. " It's replete with spending cuts that will not be made, plus it forces people to pay indirectly for the new layer of "regulations, taxes, and fees" through decreased wages, a point Hennessey makes as well. Greg Mankiw thinks the bill might mean an 80%+ marginal tax rate on workers between 100% and 200% of the poverty level.

So, the left and the right hate it. Strangely enough, they seem to have the same basic reason: average people are going to get squeezed. The left says that the bill does not do enough to keep their health care costs down. The right says the bill is going to reduce their disposable income.

God help us all if both sides are correct.

Therein lies another problem with omnibus bills such as this, and why I really fault the President for not lowering his sights. As I have noted many times, omnibus bills have a reduced chance of passage because they deal with so many issues, thus increasing the likelihood that a legislator will find a poison pill in there somewhere. But that's not the only problem. Suppose that there is a hypothetical bill that could pass: what will it look like? Will it be full of half-measures that are the product of political compromises, rather than a coherent attempt to deal with the problem in a straightforward manner? Will most legislators actually dislike it, and only support it for political purposes?

The recent suggestion that Obama and the Democratic majority need a bill - any bill - should give everybody (Republicans, Democrats, and Independents) pause. When politicians start talking like that, they're signaling a willingness to sign onto a bill that might not actually fix the problems just so they can claim "success." As regards the Baucus bill, I'd note with interest that its key enthusiasts are Max Baucus, Kent Conrad, Olympia Snowe, and sundry House Blue Dogs. All of these legislators share the same quality: they are of a different party than their respective electorates. The Baucus bill might help them with their reelection efforts by minimizing the extent to which their voters are pissed off at them, but does that make it a good bill?

The challenge the Democrats have is finding some sort of compromise position that can unite the various factions of their diverse caucus. The concern I have is that said compromise is going to be an incoherent jumble that does not address the central challenges of American health care, and perhaps makes them more severe. That is the sense I get from reading the left and the right on the Baucus bill, which is - at least per the conceit of its designer - supposed to be "balanced." That might be good politics, but is it good policy? I'd say not this time. Whenever the left and the right agree on something, you can usually take that consensus to the bank. In this case, it means that the Baucus sausage just plain stinks.

-Jay Cost