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Clinton Runs on Obamacare Benefits, Not Costs

Jonathan Bernstein is a Bloomberg View columnist. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.
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Is Hillary Clinton signaling a turning point in the health-care debate – one in which Democrats adopt the same fiscally irresponsible position that Republicans take?  

Democrats have been at a disadvantage in waging the public-opinion war because they've been mostly realistic about its costs.  (Yes, there have been exceptions: Barack Obama’s claim that people could keep their old plans if they wanted, for example -- perhaps the most egregious example of over-promising.)

This isn’t just about talking points. Democrats writing the Affordable Care Act in 2009 took Congressional Budget Office cost estimates seriously, and changed their bill to ensure it was projected to lower the federal budget.

Meanwhile, Republicans have spent the last six years attacking every funding mechanism and other cost of the law while in most cases promising that their (still unseen) alternative would somehow provide all the benefits that the reform has brought. Every Republican politician claims the conservative alternative to Obamacare will cover those with pre-existing conditions, for example, but not one of them has suggested how to pay for it.

So it was a surprise when Clinton came out this week for repeal of the “Cadillac tax” -- the Obamacare provision that tries to cut overall health-care spending by limiting the current tax advantages for gold-plated employer-linked health insurance.

As HuffPost’s Jonathan Cohn explains, the Cadillac tax is a provision of the law that “economists love and pretty much everybody else says they hate.” Many unions dislike it because they have bargained for excellent insurance for their members that is worth less to workers under the tax; they also don't trust that employers, if they cut back on compensation in the form of health insurance, would make it up with increased wages. Republicans hate the tax because, well, it’s a tax. Economists like it because it promotes efficiency and fights medical cost increases.

Clinton didn’t recommend an alternative way to fight overall health-care inflation. Nor has she suggested, at least so far, a different revenue stream to replace the tax revenue. Perhaps she will, in which case her proposal may turn out to be perfectly responsible, whether one agrees with it or not.

I wonder, however, if she’s up to something more clever, assuming that’s the right word. She may decide to campaign against the Cadillac tax, and leave it up to Congress to replace it – pledging, if she’s elected, to sign something only if it replaces the revenue lost. She knows that even a Democratic Congress would be unlikely to find a replacement for the tax, and a divided or Republican Congress assuredly would not. So she would be reaping the gains of running against the unpopular provision without doing anything to disrupt Obamacare after all.

If this is what she’s up to, the fight to defend health-care reform would be on terrain more favorable to Democrats. 

Is this strategy irresponsible? Perhaps. But is it more irresponsible than Republicans' mythical promise to “replace” Obamacare? Certainly not.

  1. Democrats used one budget gimmick in the Affordable Care Act; by phasing in the program slowly, they were able to keep the initial 10-year price tag artificially low. But that had nothing to do with the deficit. The medium- and long-term deficit reductions in CBO projections are as real as any such forecasts can be. 

  2. Conservative alternatives to Obamacare exist, as Philip Klein has documented. Conservative politicians have yet to embrace them, however.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Jonathan Bernstein at jbernstein62@bloomberg.net

To contact the editor responsible for this story:
Katy Roberts at kroberts29@bloomberg.net