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The Public Option: Substance and Symbolism

As the White House and the Democratic Senate leadership continues health care negotiations with Democratic "centrists" and a Republican or two, with a nervous eye cast towards what House Democrats can tolerate, the intra-progressive dispute over the indispensibility of the public option has erupted once again.

The ever-estimable Paul Starr, who's been beating this drum virtually all year, fired the first shot in the latest debate on Monday in the New York Times, arguing explicitly that the public option as it has evolved in Congress is not worth fighting for:

An earlier version of the public option, available to the entire public, might have realized progressive hopes and conservative fears. By paying doctors and hospitals at Medicare rates (which are 20 percent to 30 percent below those paid by private insurers), the public option would have had a distinct price advantage. But by severely cutting revenue to health-care providers, it would also have set off such a political crisis that Congress would never have passed it.

Instead, the bills in Congress now call for the government plan to negotiate rates with providers, as private insurers do. That limitation exposes a defect in the idea. The government plan may well have to charge higher premiums because it is likely to attract more than its share of the chronically ill and other high-cost subscribers. It could go into a death spiral of mounting costs.

But giving the exchanges the necessary authority to regulate private insurers could solve many of the problems that motivated the public option in the first place. Strengthening that authority and accelerating the timetable for reform are what liberals in Congress should be looking for in a deal.

Two days later, the influential Washington Post blogger Ezra Klein echoed Starr's argument, suggesting that larger subsidies for insurance purchases and tighter regulation of private insurers would accomplish more than a largely symbolic rearguard fight to preserve an already-watered-down public option.

Another influential online voice, Hullabaloo's Digby, took up the challenge with an eye-catching post:

Ezra believes that if the votes aren't there for a decent public option then the horse trading should be around getting something good in return for giving up the public option rather than negotiating the terms of the public option. That would make sense if the public option were just another feature of the health care bill. But it is not. It is the central demand of the liberal base of the Democratic Party in this rube goldberg health care plan and has long since gone way beyond a policy to become a symbol.

Perhaps that is wrong on policy grounds. People will argue about that forever. But that doesn't change the fact that it is no longer a matter of policy but rather a matter of political power. And to that extent it cannot be "bargained away" for something like better subsidies, even if it made sense. "Bargaining away" the Public Option is also the bargaining away of liberal influence and strength.

And that led my Progressive Policy Institute colleague Elbert Ventura at ProgressiveFix to charge that Digby had "given the game away" by admitting the public option was about symbolism, not substance:

Digby argues that the implications of the public option extend far beyond health care, that “powerful people” are “desperate that the liberals are not seen to win this battle.” Funny, because I thought the way that progressives win this battle is by making health care accessible and affordable to millions of Americans who currently don’t have it. According to some very smart people, the public option is playing a steadily diminishing role in achieving that goal. But don’t tell that to Digby, whose position now boils down to: Why bother with policy advances when we can have symbolic victories (or, heck, defeats)?

While personally, I ultimately come down on the side of Starr, Klein and Ventura in this debate, and have felt the public option has been overemphasized by both sides of the health care battle for a good while, I think Digby's critics are missing something important that has implications for the endgame of health care reform and other issues as well. She speaks for a considerable number of progressives who basically despaired of a good health reform bill the moment the House eliminated the linkage of the public option from Medicare payment rates--the "robust" public option that so many Progressive Caucus members had pledged to demand at the risk of their votes on final passage. Unlike the public option as it exists in the Senate debate, that "robust" PO wasn't a matter of symbolism; it reflected the views of millions of single-payer advocates on whose behalf the PO was devised in the first place. These are folks who believe the existence of a for-profit health insurance industry in this country is a moral calamity, and supported a "robust" public option in order to demonstrate that private insurers could not compete with a properly constituted public system. Moreover, they believed, and still believe, that a "reformed" system that includes an individual mandate and public subsidies for private insurance purchases, without a "robust" public option, represents a massive taxpayer subvention of for-profit companies that is arguably worse than the status quo.

From this perspective, what's strange is that defenders of private health insurance--or what Digby calls "Republicans and corporate centrists"--are still fighting the largely symbolic public option as it exists in the Senate today. She interprets that as a matter of pure power politics, and as an effort to crush progressive liberalism. Naturally, she thinks the Left should respond in kind--not out of indifference to "substance," but as a recognition that the real substantive fight has largely been lost, and as a demonstration of the Left's own power, backed up in this case, she argues, by public opinion.

If my interpretation of the dynamics here are right, then ironically, there may be less intra-progressive fighting over the endgame of health care reform that one would initially expect. The underlying contempt of capital-P Progressives for the weak public option at stake in the Senate may mean that if and when it's sacrificed, it will be a matter of relative indifference to some of the "robust" PO's strongest supporters. Chris Bowers of OpenLeft, not only a "robust" PO champion, but someone extremely interested in the ability of the Left to flex its muscles on this and every other issue, created another stir this week by concluding that he supported final passage of a health reform bill on the limited grounds that even access to bad, immoral health insurance policies would save lives. Others will probably reach the same conclusion, though not happily.

But what this debate illustrates is a broad and pre-existing gulf between Democrats on a pretty fundamental issue. Those of the Clintonian, "New Democrat" tendency have long argued for the use of "market means" to implement progressive "public goals." In the context of health care, that's always meant support for what used to be called "managed competition," and more recently, "premium support": a private health insurance system regulated and subsidized by government to provide universal coverage. On much of the Left, as noted earlier, "market means" are considered inherently illegitimate when it comes to health care. In the end, the "public option" didn't serve to bridge that gap. But we all need to be honest about the gap itself, and aware of its possible existence in other areas of public policy.

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Notice that the so-called "centrists" are the ones who have refused to compromise on the public option. They have been successful at insuring progressives will do everything in their power to see them driven from office, or as an alternative, vote for the town dog, if it's name is on the list the next time they get to demonstrate their love of what the Democratic Party has become.

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