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Obama's Reality Problem

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WASHINGTON -- At first it seemed plausible that President Obama had a communications problem on health care -- to which the solution was always more and more Obama. But exposure did not translate into persuasion.

Then it seemed useful to diagnose a partisan problem, blaming a small minority of congressional obstructionists and town hall crazies for frustrating the will of the majority -- until polls showed a majority opposing Democratic approaches to health reform. More Americans (according to a recent Washington Post poll) now think that health quality, costs and their own insurance coverage will get worse under Obamacare than believe these things will improve.

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In fact, Obama has a reality problem on health care, and it has begun to threaten his standing as a leader. He staked the success of his early presidency -- perhaps of his entire presidency -- on a health reform both vague and divisive, which manages to anger deficit hawks as well as liberals who believe that compromise has already gone too far. Obamacare has been the political version of the neutron bomb, vaporizing supporters while leaving every structural obstacle in place.

The political damage is already considerable. Obama has seen one of the largest drops in approval for a new president in modern times. Confidence among political independents that Obama has the ability to make the right decisions has fallen by 20 percentage points since his inauguration.

Why is the reality of comprehensive health reform so difficult? Some structural challenges have complicated this issue since the days of Harry Truman. Because there are vastly more people inside the current health care system than outside it, the majority tends to be risk-averse and suspicious of efforts that might benefit the minority at their expense. And millions of Americans associated with the health industry -- not just a few insurance company fat cats -- have a financial interest in the outcome of the health reform debate. They naturally try to calculate what changes would mean to them, and uncertainty encourages conservatism.

Obama thought -- not without reason -- that his political moment might be different. His electoral mandate was broad. An atmosphere of economic crisis, he calculated, might leave Americans open to Rooseveltian social innovation.

It was a miscalculation. Americans were neither as desperate nor as malleable as they were during the New Deal. Obama's massive spending, intended to stabilize the economy, also drained the Treasury, making it more difficult to propose major new expenditures. Deficits of $9 trillion over 10 years have raised the prospect, according to Warren Buffett, of an American "banana republic" -- endlessly printing money, weakened by inflation and abandoned by foreign bond investors.

At the same time, as William Galston of the Brookings Institution points out, public trust in government remains "close to all-time lows." "Even when President Obama's popularity was at an all-time high, in March and April, trust in government barely moved off the lows of the fall. Obama's personal popularity did not translate into a belief in the efficacy and integrity of government."

Add to this the fact that one of the main sources of revenue to fund Obamacare is reductions in Medicare. Many seniors are naturally concerned that proposed cost constraints in this program might eventually mean service constraints. And it doesn't help that cuts in Medicare would be used to fund someone else's entitlement, instead of strengthening Medicare itself.

Democratic partisans still insist that imposing reform by a "go-it-alone" strategy is possible and necessary. The political cost, the argument goes, has already been paid. Why not reap the political benefit by pleasing the base? Didn't we see, in 1993 and 1994, the cost of coming up empty on health reform? It can't happen again.

This might make sense if the main obstacle was Republican resistance to a popular bill. But it isn't. Democrats are fighting against a swift current of fiscal responsibility, widespread skepticism about government and resentment against the use of Medicare as the smashed piggy bank for reform.

A party-line, Democratic transformation of American health care in this environment -- in the midst of decisively losing a public argument -- would smack of power-hungry radicalism, more the liberalism of Robespierre than Jefferson.

Obama's choices on health care during the next few weeks will determine much about the nature and trajectory of his presidency. Eventually it comes down to a question: Will Obama make necessary strategic adjustments before his political humiliation -- or after it?

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