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Health Care and the Budget

As Washington gears up for an apocalyptic battle over President Obama's budget proposals, the issue that most looms over that battle is the administration's decision to fold two large policy initiatives into the process--health care reform and climate change.

When it comes to health care, we now are in a position to know a lot more about how that decision was made, thanks to Jonathan Cohn of The New Republic. He has an article out today that explains the internal debate in the transition team and then in the White House over the timing of health care reform and its connection with the president's first budget. Most interesting in this story is Obama's own crucial role, particularly during the key juncture when would-be HHS Secretary Tom Daschle was first distracted and then sidelines by controversy over unpaid taxes:

[H]ealth care, in the end, might have gotten pushed aside--except that one very senior official in the administration kept insisting that it stay on the agenda. That official was Obama himself.

Another fateful decision--the extent to which the administration would offer a highly prescriptive and comprehensive reform plan, or leave significant wiggle-room for Congress--was also made personally by the president, who had to choose between larger and smaller budget proposals for health care:

Rejecting the $1 trillion proposal, because the offsets it required seemed too severe, Obama went with the $600 billion option--$634 billion, to be precise. The sum wasn't enough to finance universal coverage; an actual package could cost $1 trillion, if not more, according to many estimates. But Obama decided simply to note that fact and promise to work with Congress on finding the extra money--in a nod to the fiscal concerns of Orszag and Summers. Strategically speaking, this approach was consistent with the widely accepted lesson of the health care battle of 1994--that the Clinton White House should have let Congress take more ownership over the process.

It's obviously too early to judge how well these decisions play out. But Cohn's account helps illustrate how thoroughly they were discussed, and makes it clear that Obama :can bring his advisers to him--rather than the other way around."