CBO calculations helped seal the fate of health care reform

Published Aug. 25, 1994|Updated Oct. 7, 2005

When the history is finally written of Bill Clinton's failure to pass his far-reaching health reform proposal, the centerpiece of his commitment to "change," one name will loom large in the narrative: Robert D. Reischauer, director of the non-partisan Congressional Budget Office.

After months of debate, it's clear not only that the Clinton proposal for a new entitlement _ universal health care insurance _ is dead, but that major alternative programs, including those advanced by Democratic leaders George Mitchell and Richard Gephardt will also not see the light of day.

If any health reform package is to pass during this session of Congress, it will likely be a modest set of improvements to the current system _ at best a cosmetic device that will enable the President and Mrs. Clinton to argue that their stirring effort produced at least a beginning of reform of the health system. But even this much is not dead certain.

In seeking an explanation for congressional resistance to what was intended to be the capstone of the new administration's first-term effort, policy wonks have focussed on various reasons that frustrated health reform.

They cite amateurish White House staff work; Hillary Rodham Clinton's secrecy in working out the program in the first place; the impact of Whitewater, and the resultant attack on the president's character; the loss of Democratic party discipline; and plain old politics, in which the Republicans see a golden opportunity to embarrass the president.

Then there were "Harry and Louise," the actors who spoke for the entrenched insurance industry in an effective television campaign.

All of these factors played a role. But the extraordinary impact of the CBO and its judicious director cannot be ignored. Reischauer, a tall, competent economist from Columbia University and Harvard, has been running the CBO for the past five years, but is hardly a household word.

Yet, the collapsing prospects for the Clinton, Mitchell, and Gephardt plans can be closely correlated with the new eminence of the CBO, which, by laying out the cost of each plan in simple but restrained language, has made most seem too risky, too complicated, or totally unworkable. CBO offers a budget-oriented reiteration of the fact that there is no such thing as a free lunch. For example, Reischauer came as close as he could to saying flat out that the Mitchell plan will not work, being "difficult if not impossible" for individual states to implement.

Reischauer's oral presentations before congressional committees are models of poise, dignity and caution. He's impressive at a time when the entire congressional process is driven by budgetary restraint. A sophisticated observer grumbles that the process can defeat sound government: "If a member has a proposal, it may have to be rejiggered to fit the way CBO 'scores' the cost. As re-worked, it may be 'scorable' (acceptable) to the CBO, but not the best policy."

Reischauer conceded in a chat with me Monday that "the most important role we play is to work with a (legislative) sponsor as they fine-tune their legislative language."

Plainly, Reischauer did not set out to upend health reform proposals when the congressional debate started. CBO, a service agency for the Congress, responds to congressional requests for evaluation of legislative proposals. Painstakingly, in every analysis of every health bill, the CBO noted that because of the magnitude of the changes proposed, the full impact would be difficult to spell out.

CBO was set up by budget legislation in 1974, when congressional Democrats began to mistrust Richard Nixon and his budget bureau. At times since then, Republicans have viewed CBO with some suspicion. But grudgingly, even partisan politicians admit that the CBO over the years has gained almost total credibility.

In the wake of the CBO's steady stream of negative reports, stunned Democratic leaders gradually lowered their sights. They had little choice: This is an era in which Reischauer's cold-turkey reviews fit neatly into Congress' latter-day obsession with budget deficits, promoted by Bill Clinton, who, prodded by Ross Perot, made budget reduction his top legislative priority in 1993.

When Clinton sent his proposal to Congress for universal health care, Reischauer raised troubling non-budget questions about economic impacts of the bill. For example, he said employers facing an increase in premiums they would be required to pay for their workers would compensate by reducing cash wages.

In the interview, Reischauer modestly asserted that the CBO has been doing nothing more than follow the same down-the-middle guidelines established by its first director, Alice M. Rivlin, in 1975. But he conceded "there is no question of the influence that the CBO is having on the debate (over health care.)"

Reischauer said his goal is to provide a balanced appraisal of the various proposals "in a clear way that interested citizens can understand." It can't have made the Clintons very happy, but Reischauer has done his job well.

Hobart Rowen