President Obama Abandons the Public Option Again -- What it All Means

The President’s most trusted advisor, David Axelrod told Politico:

“I think it’s fairly obvious that we’re not in the second inning. We’re not in the fourth inning. We’re in the eighth or ninth inning here, and so there’s not a lot of time to waste.”

That is about as good as it gets in terms of any admission from the White House that their signature initiative is in trouble (to continue the baseball analogy, the White House is behind) and the game is winding down.

A mid-August poll by Rasmussen of likely voters put President Obama’s support for a health reform bill at 34% without the public option:

“Just 34% of voters nationwide support the health care reform plan proposed by President Obama and congressional Democrats if the so-called “public option” is removed. The latest Rasmussen Reports national telephone survey shows that 57% oppose the plan if it doesn’t include a government-run health insurance plan to compete with private insurers.”

CBS News today had more bad health care polling news for the President:

“President Obama’s approval rating on health care has dropped six points since July to 40 percent, and now more Americans, 47 percent, disapprove of his handling of health care, according to a new CBS News poll taken between Aug 27 – 31.”

Here is a summary of other politically significant poll numbers (i.e. have an actual effect on the one thing Members of Congress care most about: getting re-elected) from Sean Trende at RealClearPolitics:

Rasmussen reports that 53% of Americans oppose the health care bill working through Congress, and that for the first time ever, Republicans are more trusted on health care than are Democrats. [Actually, this has happened before, just prior to, and after the failure of Hillarycare.]

Other polling numbers are just as bad. A June Pew poll shows that the percentage of people who think that the health care system needs fundamental change or complete rebuilding is about the same today as it was in June of 1994. According to a February NBC News poll, almost twenty percent fewer people today say they would pay higher taxes so that everyone could have health insurance (49%) than said so in 1993 (66%). It’s also down from 2007 (53%).

Democrats may counter that some polls show that the actual pieces of Obama’s plan have majority support. This doesn’t matter. What matters is that what the public understands to be in Obama’s plan isn’t popular. Polling from 2005 showed that Bush’s actual plan for social security – allowing younger workers to invest a portion of their Social Security taxes in private retirement accounts – split the public 50-50, while people disapproved of the perceived Bush plan – “privatization” – by a 2:1 margin. Perception is what matters, and right now the public is against what it perceives as being the Obama plan; the late summer push to educate voters seems to have failed.

The lack of the public option (if the White House does not change its mind again) will likely reinforce the view in the House that the Senate should go first because the House does not want to walk the plank, only to have the Senate decide not to take a hard health care vote.

It is instructive to note that both ends of the spectrum of the Democratic House caucus is likely to be counseling the Senate should move first because of the President’s latest position on the public option. Those in the U.S. House who have said they will not vote for a plan without a public option are now in the position that they would rather vote on no bill, so they do not have to back up their words with a no vote. Should the House decide to proceed with a public option, and goes first, then all bets are off for any bill passing the Senate. The Senate would likely just let it die after some debate.

The former senior White House economic advisor to President George W. Bush, Keith Hennessey, makes odds assessments in his blog today on the outcome of the health reform initiative. He qualifies his assessment by saying no one knows what will happen in September and that his view is highly judgmental, but these predictions were part of his job for President Bush, and for leaders in the U.S. Senate: he puts a 55% chance of failure of a comprehensive health reform bill that looks somewhat like the one being debated now. His odds on nothing happening are 5%.

My own view is that the odds of nothing happening are much higher (about 40%) which grew when the White House said no to a public plan. (My only defense of my assessment is that I play poker well and have repeatedly been a key part of passing health savings account legislation over the last 19 years, under both Democratic and Republican Presidents and under split and one party Congresses.)

Political Uncertainty and Political Risk

There is a high degree of uncertainty and general political instability and granite-hard-opposition around health care reform in the mind of the American voter (note I said voter, not public) and especially in two key groups, independents and seniors. Gone is the sense, too, here in Washington, D.C., that health care is a political winner for the Democrats.

Senator Tom Coburn in the Wall Street Journal today said that his August experience has convinced him that the American public does not trust the White House on the issue of health care reform, and their sense of hope has turned into a sense of betrayal. If accurate, and given the public reaction so far, it is likely mostly true, this is very, very hard to bounce back from.

I think what the public is really saying, is that they think (correctly) their own health plan will change. This “my own plan will change” view is cyanide for health care reform.

One refuge for the Democrats seems to be that they believe that the reason they lost the majority in the U.S. House in 1996 was that they did not pass Hillarycare. Their logic is now, in order not to lose the U.S. House in 2010 we must pass Obamacare.

OK. Knock yourselves out.

But, tell me how passing into law a political failure like Obamacare is going to make it less radioactive? How is not responding to the concerns of the public going to help Members of Congress’s political position? Members of Congress spend their careers trying not to make voters angry. Why will doing the very thing they are most angry about make them less angry?

I was around during the Hillarycare debate and can tell you that as soon as it was apparent the Democrats had threw out Hillarycare like a live grenade, the political bleeding stopped. Had the Dems not retreated, the losses would have been far, far worse.

Furthermore, if the liberal Democrats activate their grassroots to counter the public showing up at town hall meetings, it will likely give Members of Congress even greater pause because now they know that by doing something without the public plan, they really will make both the liberals and the conservatives angry.

The poisoning of the well in the mind of the public has happened, is not likely to be changed back, and, in a nutshell, the political downside of action of the part of Congress far exceeds the political downside of inaction.

Finally, there are those who argue that the liberals in the Democratic party must have health care reform. The world is full of disappointments.

The left has seen the largest expansion of government worker hiring ever, the U.S. is pulling out of Iraq, the U.S. is negotiating with Iran, their beloved Cap and Trade passed the U.S. House, there is a special prosecutor to investigate the CIA, the White House is running interrogations of terrorists, there is nearly a trillion dollars in stimulus and public works projects which only unionized workers can work on — and the left will bolt if they do not get health care too? Unlikely.

Furthermore, there is a laundry list of hard-core, highly political health care questions which must be dealt with if any bill is to pass both Houses (see the list of ten here). And there is also the deal that the White House cut with Phrma, which Chairman Waxman has said — essentially — will only happen over his dead body.

This is not to say that those wishing to effect any outcome should stand on the sidelines and observe. No, now is the time, in September and October and November to act to influence the outcome of this legislation.

There will be no other time like it for many years. So put the coffee on, have a nice long Labor Day weekend, and suit up for months of political combat. And never, ever, and I mean ever, give up.

There is one other thing, if you look at the general political trajectory of health care reform, to date, it has been a political failure. It began as a done deal. There was no use doing anything to annoy the White House or to annoy the U.S. House or U.S. Senate leadership by publicly opposing or fighting them on any thing, many counseled.

In fact, the conventional wisdom has been wrong about just about everything on health care so far.

Just like Wall Street hates uncertainty, so do Members of Congress. And when there are grave political consequences staring at them from all directions (right and left and center) the most prudent action is to stand down.

But rational thought and rational political behavior has not been the main characteristic of this debate, and it is not likely to be on a going forward basis either.