Healthcare Reform in the Wind

A decade ago in my home state of Tennessee we were faced with state government deficits that seemed to be irreconcilable. The problem was that we have no state income tax, and our revenue model is based on a relatively high base rate of state income tax, which when combined with the local options can be as high as 8.75%.

So then Gov. Don Sundquist broached the one option you did not want to ever bring up in the state: a state income tax. In an ideal world the debate would have been a respectful discussion of the merits and demerits of having so much state revenue tied to consumer spending, but in the real world of political reality the debate was quite literally drowned out by protesters who staged noisy, active rallies mere feet away from the state house steps.

It worked. The idea has never been revisited.

I started to get that same feeling again as I read reports of the same scene being repeated in Congressional districts across the country, as protestors seized on the public option as the philsophical hill they will die on. Policy has cut too close to their core beliefs, and when that happens politics get very, very messy. It has to make the public option as envisioned by the liberal Democratic core impossible now.

But those same Democrats are still holding onto the hope of including a public option.  Speaker Nancy Pelosi and others claim that without it the bills lose 100 votes. With it the legislation does not pass the Senate.

What happened in Tennessee all those years ago was the pressure put on the cracks in the tax reform’s support team. The only way to push through spectacularly unpopular change is to have a unified team from the start. Certainly the cracks in the public plan have been opening for weeks, and burst over the weekend as the President himself hinted that the public option was not a dealbreaker.

While the idea may be that in showing willingness to negotiate on this point, the administration hopes to form consensus and push through a compromise plan. In reality, the cracks will only grow wider. The oppoenents will only be more emboldened. And if that happens, just like the income tax in Tennessee, the idea won’t get touched again for a long, long time.