Sunday, July 19, 2009

Rushing To Tell a Story

Barrack Obama is in a rush. By the end of July and before Congress recesses for August, he wants two pieces of legislation: his Health Care Reform Bill and the Climate Change Bill. Both look problematic.

Obama’s position is simple. If he rushes through these two Bills, he will have room to use the regulatory processes of Government to determine what they actually mean. If he accedes to the growing demands from his own party to delay on both Bills, the legislators will read them and realize that they are full of holes and very problematic. He will loose momentum and the Bills will likely be delayed indefinitely. His strategy: poorly written legislation is better than no legislation at all.

Both bills involve both new taxes and major regulatory changes for industry, families and communities. The Climate Change Bill will significantly increase the costs of transportation, energy and food and will raise, over a decade, some $600 billion in new tax revenue. The Health Care Bill is likely to cost $1 trillion and be funded through new taxes on a large swath of the American people, especially those earning $300,000 or more. He is willing to sacrifice a campaign pledge on taxation to get the health care reform he thinks he needs.

The Bills are poorly written and have not been read by most of the members of Congress. The Climate Change Bill is 1,400 pages long and contains major challenges for industry, State and Municipal governments and for the ordinary tax payer. It contains, in addition to a cap and trade provision, a job offset provision worth around $34 billion to cover the retraining costs of energy workers laid off as a result of the Bill. When Sarah Palin drew attention to this in her opinion piece in the Washington Post, the White House initially denied that this provision was in the Bill. They later corrected themselves. The White House hasn’t read the Bill either.
The Health Care Bill, now before the House and yet to reach the Senate, is complex. The Office of Management and Budget is pressing for an urgent decision in the House, despite the hesitation of many democratic representatives and the opposition of republicans. The Democratic National Committee has been running advertising campaigns targeting democratic representatives wanting more time to get better legislation.

Obama will get something. He still is popular, though his popularity is dropping – down to 57% from 64% in just two months. He still can use the power of the office of President to cajole, bribe and force votes in a democratic congress.

But its bad politics and bad legislation. The Climate Change Bill, according to leading climatologists, will have little or no impact on the climate. The Bill is opposed by all leading climate change campaigners, including James Hansen – widely regarded as the doyen of climatology. The Health Care Bill, while extending health care benefits to more Americans, will be excessively expensive. Douglas Elmendorf, chief of the Congressional Budget Office, said this of the leading Democratic health care proposals in the House and Senate: "In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount and, on the contrary, the legislation significantly expands the federal responsibility for health care costs."

We can offer a translation: The Health Care Bill, as it stands, do not meet the president's promise to reduce the long-term drain of health care spending on the federal budget. The need for the proposals to reduce the long-term operating costs of health care was a pre-condition of the legislation set out by Barrack Obama. He has compromised.

What will happen, when this legislation passes through Congress as amended by both Houses, is that they will contain so many compromises, pork barrel deals and watering down of risk that neither will fulfill their initial intention.

Obama, like Brown and Mandelson in Britain and Sarkozy in France, are practicing the new politics. Politicians and the chattering class have abandoned the idea that there is an independent reality “out there” which can be independently verified and assessed. The new political epistemology moves us from truths that can be proven and verified or falsified to narratives that can be constructed. The old dictum that “comment is free but facts are sacred” (according to C P Scott, editor at one time of The Guardian) is no longer the case, since in many cases (health care, emission reporting, global warming, economic recovery) facts are “fitted” to the narrative. On both climate change and health care, Obama wants to construct a narrative which, however divorced from the facts, will enable him to claim that he achieved more in a year in the reform of the United States than many of his predecessors did in two terms. This will assure his election for a second term, especially against an unfocused and disorganized opposition.

Rushed legislation is rarely good legislation and tends to be subject to legal challenges and significant delays in making it work. We should not welcome poor legislation, especially that which will change key industries dramatically with consequences yet to be fully understood.

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