The Vulnerability of ‘Reform’

Health care overhaul could quickly fall victim to decay.

Even before the health care overhaul emerged from Congress, doubts were surfacing about its durability.

Partisanship was one important reason. The closed-door process Democratic leaders used to fashion a final bill ensured continued strong Republican opposition, and so the most ambitious expansion of the American welfare state in decades was destined to begin without any semblance of political consensus.

History shows that major legislative and regulatory initiatives often are vulnerable to crippling change or even repeal in the aftermath of their adoption. Some succeed, becoming part of the fabric of American economic life. Social Security and Medicare are notable examples. But both enjoyed bipartisan support at the outset.

The conditions that spell durability or doom for major federal initiatives are analyzed in a book by Eric M. Patashnik, associate professor of politics at the University of Virginia. Reforms at Risk: What Happens After Major Policy Changes Are Enacted (Princeton University Press, 2008) was honored in November with the Louis Brownlow Award from the National Academy of Public Administration.

In a lecture prepared for NAPA fellows, Patashnik used the fruits of his research on earlier programs to forecast troubles for the health care overhaul. The landmark 1986 Tax Reform Act, he observed, succeeded for a time in lowering rates for millions of Americans, but did not create a strong enough constituency among them to fight off steady erosion of the tax base by highly motivated special interests. The 1996 Freedom to Farm law did cut agricultural subsidies-but only until the farm economy began to deteriorate. The 1988 Medicare Catastrophic Coverage Act was repealed just 16 months after its enactment, victim in part to front-loading tax collections before benefits started to flow and to poor communications planning by the government. The high-discretion procurement regime the Clinton administration instituted has given way to re-regulation prompted by the occasional scandal.

Reforms that create economic incentives, new institutional structures and major private sector investments have proved durable, as airline deregulation, the pension reforms spawned by the 1974 Employee Retirement Income Security Act and development of sulfur dioxide trading markets have demonstrated.

With regard to health care, Patashnik sees the absence of bipartisan support as only one of many challenges to sustaining the new program. Backloading the benefits and subsidies in the program to 2013 is a significant weakness, especially since its costs will kick in much sooner. The program's income-redistribution features also confer vulnerability: its benefits accrue mainly to the 15 percent of Americans who are uninsured while others could see their health-related costs increase.

Patashnik also worries that the program won't change interest group dynamics (as airline deregulation did), with the consequence that private corporate opponents might actually be joined by a skeptical seniors bloc in concluding that their interests have not been served. Further, he says, the program rests on "politically dubious assumptions" that Congress will allow painful but financially necessary cuts. Successful reforms recast governance and institutional structures, but this one probably won't. Finally, Patashnik is concerned that misinformation disseminated by opponents will sour a climate that is already inhospitable to major public innovation, inasmuch as large majorities of Americans have so little trust in the federal government.

Liberal Sen. Tom Harkin, D-Iowa, called the Senate bill a "starter home" that would be improved over time. But unless there's a surge of public support for the health overhaul once its details are better known, the starter home could prove to be one of those subprime properties that become vulnerable to decay-and even to foreclosure by the very government that built it.

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