Obama’s Super Smart Health Reform Play


The White House led today’s rollout of its $3.5 trillion budget by making a big splash on health care—creating a $634 billion fund for health care reform, which the president called a “very substantial down payment.” It’s a bold choice, to be sure, but it’s both smart and unavoidable.

By starting with the money, instead of with a plan, the administration has avoided the storied blunders of the Clinton White House’s health reform effort. The message here is clear: The Obama crew won’t be squirreling away in private, fending off all comers and emerging with a massive plan to shove down Congress’ throat. Instead, they’re starting the game by writing a big fat check that they’ll ask Congress and all other stakeholders to help devise a plan for spending.


It’s also long been clear that the administration (wisely) sees its broader economic goals as inextricably tied to health care reform, which means that reform has gotta get done this year. It also means that the White House had no choice but to make its opening health reform play in the budget. To understand why, read Ezra Klein’s great profile of Obama budget director Peter Orszag. Klein, writing in THE AMERICAN PROSPECT, explains Orzag’s decade-long effort to define health care reform as a prudent money-saver rather than a spending boondoggle:

"Orszag made his name in the late years of the Clinton administration as a hotshot staffer for the Council of Economic Advisers. He was soon tapped to run the Hamilton Project, which was understood by most to be former Clinton Treasury Secretary Robert Rubin's government-in-exile. He is, in other words, a member in good standing with D.C.'s economic elite. It's the sort of background usually associated with self-appointed wise men who advise that fiscal responsibility requires that we cut Social Security benefits, means-test Medicare, and limit our ambitions to expanding children's health insurance. Orszag, however, has been leveraging his establishment credentials to wage a quiet war on this limited vision of "fiscal responsibility." In 2005, he was a key economist in the fight to protect Social Security against George W. Bush's privatization scheme. In December 2006, he was nominated by a bipartisan search committee to direct the Congressional Budget Office, replacing the outgoing director, Doug Holtz-Eakin.

From his perch at the CBO — which is to say, as one of the few individuals charged with safeguarding the federal budget — he's been arguing that fiscal responsibility means, above all, serious health-care reform."

So Orszag’s aim—and now, Obama’s—is to take the GOP chatter about how much money the Dems spend and turn it on its head, to make it an argument for dramatic, bold health reform. Of course, then, they led the day of promoting a document they’ve dubbed “A New Era of Responsibility” with health reform.

Watch for more of this tactic all year. Every time the Republicans cry foul over spending, Obama will reply by saying, yup, that’s why we’re gonna fix health care. Remember all those promises he made while campaigning about fundamentally changing the conversation in D.C.? Never mind the bipartisan drivel. This kind of redefinition of conventional wisdom is what that change looks like.