The Government We Deserve

Many families with moderate earnings pay 20 percent or more of their income for health insurance. By Congressional Budget Office estimates, a family making $54,000 a year can expect a moderate-cost insurance policy to cost about $14,700 in 2016. True, employers often contribute a big chunk of the total. But most economists believe that the family really pays by accepting lower cash wages.

In a letter to top Senate Democrats, President Obama recently stated that he was open to the "principle of shared responsibility—making every American responsible for having health insurance coverage, and asking that employers share in the costs." This sounds very much like support for what are sometimes labeled individual and employer "mandates," though in the Presidential campaign he opposed requiring adults to buy insurance, except for their children. Done the right way, "mandates" could increase dramatically the numbers of those insured, while helping drive down the rate of increase in health care costs. Done the wrong way, they can be unenforceable or drive up the number of unemployed. The Senate Finance Committee increasingly has been turning to mandates as part of a package of health reform.

Again and again, health reformers believe they have identified ways to save money through more efficient delivery of care. So why can't we count on those savings to budget the coming expansion of health care for Americans or lower cost growth?

If we are to achieve health reform—that is, affordable, sustainable, and constantly improving health care available to all—we need to start looking as much to the psychology of the issue as to the economics and politics.

Pundits and press alike are declaring President Obama's budget "transformational." ... Administration insiders are more careful with their claims, knowing that the hard work remains to be done.

"If you're depressed when Congress fails to get an 'A' on legislation, you should never work for government. Getting from an 'F' to a 'C' must be fulfillment enough." That's the advice I got many years ago at the Treasury Department from Jim Wetzler, who worked for the tax-writing committees of Congress, later became Commissioner of Taxation and Finance for the State of New York, and most recently was on an Obama transition team that reviewed the Treasury Department.

In his inaugural speech, President Obama attempted to move beyond the partisan divide over size of government, claiming that his tenure would be mainly devoted to making government work. Some might view this statement simply as a political appeal to moderates in both parties—echoing President Clinton's 1996 election year claim that "the era of big government is over." Others more cynically might view it as a ploy to get around the dilemma that plagues almost every winning candidate when campaign promises for both tax cuts and spending increases face the reality of governing.

Now that the United States has discovered that it was easier to fall into a recession than to climb out of one, the Obama administration needs to learn an equally urgent lesson. Timeliness is important not just for getting into, but also backing out of, an economic stimulus package.

President-elect Obama's chief in-house economic advisor Larry Summers suggests in a recent Washington Post piece that the new Administration will put a lot of effort into addressing long-term growth challenges, not just short-term policies that generate consumer spending. How? Through "investments." To make sure we get the point, Summers uses that word or some variation 12 times.

The breakdown in the financial markets, our huge budgetary mess, and multiple government scandals have only highlighted the depth of our government's problems. Recently, I noted that the required governmental reforms are so extensive that President Obama will find it difficult to succeed by taking one-off approaches to each of the nation's problems rather than addressing them in a more unified way. Here I strengthen my case by turning from the depth to the breadth of brokenness of government.