SALON

Monday, Mar 22, 2010 2:23 PM UTC

How healthcare reform makes history

This isn't a return to the New Deal or the Great Society. It's an incremental step forward, with big implications

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Topics: Healthcare Reform

It’s not nearly as momentous as the passage of Medicare in 1965 and won’t fundamentally alter how Americans think about social safety nets. But the passage of Obama’s healthcare reform bill is the biggest thing Congress has done in decades, and has enormous political significance for the future.

Medicare directly changed the life of every senior in America, giving them health security and dramatically reducing their rates of poverty. By contrast, most Americans won’t be affected by Obama’s healthcare legislation. Most of us will continue to receive health insurance through our employers. (Only a comparatively small minority will be required to buy insurance who don’t want it, or be subsidized in order to afford it. Only a relatively few companies will be required to provide it who don’t now.)

Medicare built on Franklin D. Roosevelt’s New Deal notion of government as insurer, with citizens making payments to government, and government paying out benefits. That was the central idea of Social Security, and Medicare piggybacked on Social Security.

Obama’s legislation comes from an alternative idea, begun under the Eisenhower administration and developed under Nixon, of a market for healthcare based on private insurers and employers. Eisenhower locked in the tax break for employee health benefits; Nixon pushed prepaid, competing health plans, and urged a requirement that employers cover their employees. Obama applies Nixon’s idea and takes it a step further by requiring all Americans to carry health insurance, and giving subsidies to those who need it.

So don’t believe anyone who says Obama’s healthcare legislation marks a swing of the pendulum back toward the Great Society and the New Deal. Obama’s health bill is a very conservative piece of legislation, building on a Republican rather than a New Deal foundation. The New Deal foundation would have offered Medicare to all Americans or, at the very least, featured a public insurance option.

The significance of Obama’s health legislation is more political than substantive. For the first time since Ronald Reagan told America government is the problem, Obama’s health bill reasserts that government can provide a major solution. In political terms, that’s a very big deal.

Most Americans continue to be suspicious of government. That distrust is deeply etched in our culture and traditions. Our system of government was devised by people who distrusted government and intentionally created checks and balances, three separate branches, and almost insuperable odds against getting big things done. The period extending from 1933 to 1965 — the New Deal and the Great Society — was an historical aberration from that long tradition, animated by the unique crises of the Great Depression and World War II, and the social cohesion that flowed from them for another generation. Ronald Reagan merely picked up where Calvin Coolidge and Herbert Hoover left off.

But Reagan’s view of government as the problem is increasingly at odds with a nation whose system of healthcare relies on large for-profit entities designed to make money rather than improve health; whose economy is dependent on global capital and on global corporations and financial institutions with no particular loyalty to America; and much of whose fuel comes from unstable and dangerous areas of the world. Under these conditions, government is the only entity that can look out for our interests.

We will not return to the New Deal or the Great Society, but nor will we continue to wallow in the increasingly obsolete Reagan view that we don’t need a strong and competent government. Yesterday’s vote confirms our hope that we can have both strength and competence in Washington. It is an audacious hope, but we have no choice.

Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written 13 books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org. More Robert Reich.

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On March 21, 2010, the House voted to approve a healthcare bill intended to overhaul the system and guarantee Americans access to health insurance. The vote was 219 to 213. Problem solved? Hardly.

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