The Obama Plan

Via Yglesias, Igor Volsky has a good chart explaining the president's plan that he's going to take to the big summit on Thursday.

I'll leave it to others to talk about the policy implications of the various pieces, but I can talk a little about the politics.  The most important piece for the Democrats, as far as short-term politics (i.e. through the 2010 elections) is concerned, is that they will, if they pass this, be able to claim that they fully filled the donut hole.  As I've said, it sure looks to me as if that one will have far more of an immediate and tangible effect on people -- and not just people, but people who vote in disproportionate numbers -- than anything else that might have wound up in the bill this year.  Smart move.

For Senators, I think once the smoke clears what's going to matter is exactly what is in the reconciliation bill, and as far as I can see it's pretty much full of goodies.  The Nebraska fix will be in there.  Closing the donut hole will be in there.  Changes in the exchanges from the Senate bill, a complicated policy adjustment that would leave voters bewildered?  Not in there (I don't think that's why; I think it would be pretty vulnerable to a Byrd rule challenge).  No annual and lifetime limits?  Looks as if it's in there -- I think that one is also vulnerable to a challenge, but do Republicans really want to take that vote?  Lower penalties for escaping the individual mandate are in there.  Higher subsidies are in there.  The president's new plan to restrict premium increases is likely to be popular, as are whatever new anti-fraud provisions he added.  And I think the funding shift, away from Cadillac plans and to unearned income, is probably an easy vote for Democratic Senators.  Some of these provisions will make policy wonks unhappy, and if they're right the plan won't work as well years down the line, but for the politics of the here and now I'm seeing a whole lot of ice cream and very little spinach.  Remember, as I've said many times before, that for the Senate this is the only bill they're voting on, so they can talk purely in terms of fixing and improving something that's already been done (easier if it's signed into law, but still true either way). 

Now, for Members of the House, the situation is different: they need to vote for both the Senate bill and the reconciliation fix.  Volsky believes that this is a hard compromise to swallow for liberals:

But it’s unclear if progressive House members will embrace the new compromise. While the bill addresses House members’ affordability concerns, increases the excise tax thresholds and completely closes the donut hole in Medicare Part D, the legislation does not include a public option, retains the Senate bill’s state-based exchanges and keeps the start date for most reforms at 2014. (Obama’s plan also retains the Senate’s abortion compromise and most other core provisions).

Yes, there's plenty of spinach in here.  However, I continue to agree with Kevin Drum, Jonathan Chait and others that at the end of the day, all the incentives for liberals in the House point to accepting half a loaf rather than blow the whole thing up -- the "finish the kitchen" logic.  The consequences for the liberal agenda, whether on health care or anything else, are pretty severe if this fails, while adding a public option in a year or two is pretty likely if it passes.  I would say that even though the liberals have very little bargaining power here, the one thing they could ask for in exchange for going along is a very public statement by the president of his continued support for a future public option (either at the summit, or at the bill-signing ceremony, or both) and a private commitment from the president to feature the public option in his 2012 re-election campaign, assuming it hasn't passed by then.  I don't think that would scare off Blue Dog votes, and while it might not make liberals happy now it would moderately increase the already excellent prospects for actually getting a public option done, assuming Democrats can hang on to control of Congress.  But that aside, liberals would just be nuts to actually vote against these bills, assuming that Nancy Pelosi moves them to the House floor.