Overpaying as a Winning Strategy

Catching up on some stuff I missed...

Matt Yglesias made an interesting argument a few days back that, had the Obama Administration not been committed to deficit neutrality (and, as it turned out, deficit reduction) in health care reform, then the ACA could have been used for stealth stimulus.  It's an interesting idea, but I think he's misunderstanding the point of deficit neutrality when he calls it a "political talking point."  I don't think that's right, if what he means by that is general public relations.  Instead, I think the way to think of it is in the context of the broader strategy for passing health care reform, which was built not around public relations -- the administration didn't do much more than a bare minimum of that -- but around buying off interest groups who were inclined to oppose it but willing to be bought.  That's the story of the doctors, Pharma, the hospitals, and others; the plan seemed to be to sacrifice a lot of things that liberals would ideally want in the bill in order to win the support, or at least to win less enthusiastic opposition, of those groups.  I think that's how to see the deficit stuff: it was a way of buying off the "interest group" of deficit hawks both inside and outside of Congress.

When I used to teach the Clinton health care policy debacle, I used to say that Clinton's mistake was in not buying off groups, and I speculated that he should have picked two of doctors, hospitals, Pharma, and health insurance, secured their support, and then he could have won in Congress.  Barack Obama's calculation took that one farther: his team seems to have concluded that passing health care was almost impossible, and that the only hope was overkill: get as many groups on board as possible.  That was bound to be inefficient, since it meant giving away more things than was strictly necessary, but a reasonable strategy if it was unclear exactly which concessions to which groups were necessary to put together a minimum winning coalition.  Given the narrow passage of ACA, it seems to me that there's every possibility that they were correct. 

Bottom line: Hardly any Americans were going to support or oppose health care reform based on its projected budgetary effects, but among those Americans who might have cared were a handful of prominent columnists and pundits, and very possibly a handful of moderates Democratic Members of Congress.  And whether in fact that was true or not, I strongly suspect that the administration strategy was based on influencing those people, and not the larger electorate.