Obama's "preemptive concession" style of negotiating -- e.g., proposing a stimulus that was more than 1/3 tax cuts -- looked a little strange when Democrats had large majorities. With Republicans in control of the House, though, Obama's "preemptive" proposed cuts in discretionary spending hold a sane mirror up to the House GOPs crazy quilt of radically destructive cuts.
Half of his speech to the Governors' Association today was a replay of his latest weekly address and of the SOTU: cut domestic spending rationally; make essential investments in education, infrastructure and R&D; for the long term, focus on health care inflation, the engine of our long-term structural deficit. But the new parts of the speech were vintage Obama. They were verbal judo -- conceding a rational concern at the core of two extreme GOP positions, while challenging their extremist expression on two fronts: a) ending collective bargaining rights for public sector unions, and b) seeking repeal of the affordable care act.
1) On unions:
It's a 3-stroke: public employees are going to have to give something up; I myself stuck it to them rationally; their sacrifice shouldn't offset fresh tax breaks for the rich.
I also know that many of you are making decisions regarding your public workforces, and I know how difficult that can be. I recently froze the salaries of federal employees for two years. It wasn’t something that I wanted to do, but I did it because of the very tough fiscal situation that we’re in.
So I believe that everybody should be prepared to give up something in order to solve our budget challenges, and I think most public servants agree with that. Democrats and Republicans agree with that. In fact, many public employees in your respective states have already agreed to cuts.
But let me also say this: I don’t think it does anybody any good when public employees are denigrated or vilified or their rights are infringed upon. We need to attract the best and the brightest to public service. These times demand it. We’re not going to attract the best teachers for our kids, for example, if they only make a fraction of what other professionals make. We’re not going to convince the bravest Americans to put their lives on the line as police officers or firefighters if we don’t properly reward that bravery.
So, yes, we need a conversation about pensions and Medicare and Medicaid and other promises that we’ve made as a nation. And those will be tough conversations, but necessary conservations. As we make these decisions about our budget going forward, though, I believe that everyone should be at the table and that the concept of shared sacrifice should prevail. If all the pain is borne by only one group -- whether it’s workers, or seniors, or the poor -- while the wealthiest among us get to keep or get more tax breaks, we’re not doing the right thing. I think that’s something that Democrats and Republicans should be able to agree on.
2) On the Affordable Care Act: do it your way!
Which brings me to the final topic that’s going to help determine our ability to win the future, and that’s getting control of our health care costs. Now, I am aware that I have not convinced everybody here to be a member of the Affordable Care Act fan club. But surely we can agree that for decades, our governments, our families, our businesses watched as health costs ate up more and more of their bottom line. There’s no disputing that. That didn’t just happen last year. It didn’t just happen two years ago. It’s been going on for years now.If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act does -- without increasing the deficit -- you can implement that plan. That is a variant of what Obama told the Republican leadership at the healthcare summit in Feb. 2010: if you can meet the goals by better means, I'm all ears. And: I agree with Mitt Romney! Let the states do it their way -- with or without an individual mandate. That was already in the act; the Wyden-Brown bill simply accelerates it. Rhetorically, here, Obama put the states' license to experiment at the center of the ACA, challenged the governors to make that flexibility its essence.
We also know that the biggest driver of the federal debt is Medicare costs. Nothing else comes close. We could implement every cut that the House of Representatives right now has proposed and it would not make a dent in our long-term budget, wouldn’t make a dent in our long-term deficits -- because of healthcare costs. We know it’s one of the biggest strains in your state budgets -- Medicaid.
And for years, politicians of both parties promised one thing: real reform. Everybody talked about it. Well, we’ve decided to finally do something about it -- to create a structure that would preserve our system of private health insurance; would protect our consumers from the worst abuses of insurance companies; would create competition and lower costs by putting in place new exchanges, run by the states, where Americans could pool together to increase their purchasing power and select from various plans to choose what’s best for them -- the same way that members of Congress do, the same way that those who are lucky enough to work for big employers do.
And the fact is, that the Affordable Care Act has done more to rein in rising costs, make sure everyone can buy insurance, and attack the federal deficit than we’ve seen in years. And that’s not just my opinion; that’s the opinion of the Congressional Budget Office -- nonpartisan -- the same one that puts out numbers that when it’s handy to go after me, people trot out and say, boy, these are -- look at these numbers. So they’re saying we’re saving a trillion bucks because of this act on our health care costs. Otherwise, we’d be a trillion dollars more in the red. That’s something that we should build on, not break down.
Now, that doesn’t mean that the job of health care reform is complete. We still have to implement the law, and we have to implement it in a smart and non-bureaucratic way. I know that many of you have asked for flexibility for your states under this law. In fact, I agree with Mitt Romney, who recently said he’s proud of what he accomplished on health care in Massachusetts and supports giving states the power to determine their own health care solutions. He’s right. Alabama is not going to have exactly the same needs as Massachusetts or California or North Dakota. We believe in that flexibility.
So right now, under the law, under the Affordable Care Act,
Massachusetts and Utah already operate exchanges of their own that are very different -- operate them in their own way. And we made sure that the law allowed that. The same applies for other requests, like choosing benefit rules that meet the needs of your citizens, or allowing for consumer-driven plans and health savings accounts.
And this recognition that states need flexibility to tailor their approach to their unique needs is why part of the law says that, beginning in 2017, if you can come up with a better system for your state to provide coverage of the same quality and affordability as the Affordable Care Act, you can take that route instead. That portion of the law has not been remarked on much. It says by 2017, if you have a better way of doing it, help yourself, go ahead, take that route.
Now, some folks have said, well, that’s not soon enough. So a few weeks ago, Oregon Senator Ron Wyden, a Democrat, and Massachusetts Senator Scott Brown, a Republican, and Louisiana Senator Mary Landrieu, they proposed legislation that would accelerate that provision. So it would allow states to apply for such a waiver by 2014 instead of 2017.
I think that’s a reasonable proposal. I support it. It will give you flexibility more quickly, while still guaranteeing the American people reform. If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act does -- without increasing the deficit -- you can implement that plan. And we’ll work with you to do it. I’ve said before, I don’t believe that any single party has a monopoly on good ideas. And I will go to bat for whatever works, no matter who or where it comes from.
I also share your concern about Medicaid costs. I know this has been a topic of significant conversation over the last couple of days. We know that over half of all Medicaid costs come from just 5 percent of enrollees, many of whom are what’s called dual eligibles -- seniors in Medicare as well as in Medicaid. The Affordable Care Act helps address this by changing the incentives for providers so that they start adopting best practices that will work to reduce cost while improving quality.
But we understand the pressure you’re under. We understand that we’ve got to do more. So today -- and I mentioned this to Christine last night -- I’m asking you to name a bipartisan group of governors to work with Secretary Sebelius on ways to lower costs and improve the quality of care for these Americans. And if you can come up with more ways to reduce Medicaid costs while still providing quality care to those who need it I will support those proposals as well.
Obama at his best lays out the policy goals, explains his means to get there, and challenges everyone involved to come up with better means -- or simply, as in Race to the Top, with their own means. I really do get the sense that he's enjoying himself at the moment. We'll see what happens when the crunch comes -- first over this year's budget, and then in any attempt to get get a global tax/long-term spending deal.
P.S. The parenthetical below was also a sweet stroke:
Those of you who are in this room obviously are on the front lines of this budget debate. As the Recovery Act funds that saw through many states over the last two years are phasing out -- and it is undeniable that the Recovery Act helped every single state represented in this room manage your budgets, whether you admit it or not -- you face some very tough choices at this point on everything from schools to prisons to pensions.