OPINION
4A
THE DAILY ASTORIAN • THURSDAY, JANUARY 26, 2017
Founded in 1873
DAVID F. PERO, Publisher & Editor
LAURA SELLERS, Managing Editor
BETTY SMITH, Advertising Manager
CARL EARL, Systems Manager
JOHN D. BRUIJN, Production Manager
DEBRA BLOOM, Business Manager
OUR VIEW
Legislature’s
budget paints
bleak picture
O
regon’s future looks bleak – at least per the Legislature’s
budget experts.
The Oregon State Police crime lab in Pendleton
and the North Coast Youth Correctional Facility could close.
Teachers, counselors and other school employees could lose
their jobs; and class sizes could soar. Thousands of low-in-
come Oregonians could lose medical and dental coverage.
Justice could move more slowly in the state courts.
The co-chairs of the Legislature’s Ways & Means
Committee – Democratic Sen. Richard Devlin of Tualatin
and Rep. Nancy Nathanson of Eugene – have presented their
state budget framework for the next two years. Unlike Gov.
Kate Brown’s proposed budget, it would rely on existing rev-
enue instead of new taxes. But unless the Legislature does
raise taxes, Oregonians across the state would receive fewer
services.
That debate – more taxes, cost efficiencies or both – will
frame this year’s legislative session, which begins Feb. 1.
The irony is that Oregon will have nearly $1.3 billion more
in revenue to spend during 2017-19 than during the current
two-year budget period.
However, Oregon faces a $1.8 billion shortfall between
that revenue and what the state would need to keep agencies,
programs and schools operating at the same level as today.
This gap was not a surprise. Many lawmakers, especially
Republicans, had warned that the state budget was on an
unsustainable path even though Oregon – especially urban
Oregon – had emerged from the Great Recession.
The reasons have long been known. Federal funds that
financed a vast expansion of the Oregon Health Plan are
being cut back, leaving Oregon
to either pay a larger share of that
This budget
insurance or take coverage away
crisis —
from some people. Pension bills
this fiscal
continue to rise for schools and
government agencies. Voters added fiasco —
illustrates
more costs in the ballot measures
they approved this fall.
why
Meanwhile, too many legislators Oregon
expected the budget hole would be
needs
filled by Oregonians. They counted
a more
on voters this fall to pass the larg-
est corporate tax increase in state
disciplined
history. Instead, voters wisely said
and long-
no.
term
This budget crisis — this fiscal
approach to
fiasco — illustrates why Oregon
budgeting.
needs a more disciplined and
long-term approach to budgeting.
“We’re uniquely good at identifying problems and spending
money to solve them. We’re not as vigorous at looking at effi-
ciencies,” state Sen. Betsy Johnson, D-Scappoose, said.
The state lacks a guiding set of priorities of which pro-
grams and services are most important and most cost-effec-
tive. So interest groups — many of them representing worthy
causes — fight to make their case with lawmakers every two
years.
“The big challenge always is to provide the services peo-
ple want and expect with the resources they give you,” said
Sen. Bill Hansell, R-Athena, who is starting his 35th year as a
public official.
The budget framework released last week leaves Hansell
fighting to preserve the state police forensics lab in Pendleton
and to ensure state funding to deal with wolves that prey
on livestock. On our side of the state, Johnson again is try-
ing to save the North Coast Youth Correctional Facility. And
throughout the state, legislators and parents are worried the
state’s financial roller-coaster will hurt schools.
The Legislature’s No. 1 responsibility is to pass a balanced
budget. That will happen. But will it be a responsible, for-
ward-thinking budget?
Repeal and compete
By ROSS DOUTHAT
New York Times News Service
M
odern conservatism, at
least in its pre-Donald
Trump incarnation,
evolved to believe in a marriage of
Edmund Burke and
Milton Friedman,
in which the wis-
dom of tradition
and the wisdom of
free markets were
complementary
ideas. Both, in their different ways,
delivered a kind of bottom-up dem-
ocratic wisdom — the first through
the cumulative experiments of the
human past, the second through the
contemporary experiments enabled
by choice and competition.
In health care policy, however,
conservatives tend to simply favor
Friedman over Burke. That is,
the right’s best health care minds
believe that markets and compe-
tition can deliver lower costs and
better care, and they believe it even
though there is no clear example of
a modern health care system built
along the lines that they desire.
The dominant systems in the
developed world, whether gov-
ernment-run or single-payer or
Obamacare-esque, are generally
statist to degrees that conservatives
deplore. A few of them — notably
Singapore’s, the beau ideal of right-
wing health care wonks — do have
distinctive elements that conserva-
tives favor. But mostly they tend
to be much more heavily regulated
and subsidized than the system that
conservative health policy wonks
and policy-literate Republicans
would like to see take over from
Obamacare.
Which is not to say that the
conservative health policy vision
lacks empirical grounding. There is
compelling evidence that markets
in health care can do more to lower
costs and prices than liberals allow,
and good reasons to think that
free-market competition produces
more medical innovation than more
socialized systems.
But still — there is no existing
system on a national scale that
looks like the health care system
that Paul Ryan or Tom Price
would design, no wisdom of
developed-economy experience that
proves that such a system would
actually keep overall costs low
and prevent too many people from
being shut out of insurance markets.
So embracing even the smartest
conservative Obamacare alternative
requires a not-precisely-Burkean
leap of faith.
And this, in a nutshell, is why
Republicans should give serious
consideration to the proposal that
Sen. Bill Cassidy of Louisiana and
Sen. Susan Collins of Maine have
just put forward as a possible health
care reform alternative.
The essence of Cassidy-
Collins, and the reason that many
Republicans don’t like it, is that
it isn’t actually a full Obamacare
replacement. Instead, it’s a feder-
alist compromise. It lets individual
state governments decide whether
they want to stick with Obamacare
or not, which would mean that the
law would remain intact in most
blue states for the time being, while
redder states would have the oppor-
tunity to turn roughly the same
amount of money (95 percent) to a
different end.
There is no existing system on a
national scale that looks like the
health care system that Paul Ryan
or Tom Price would design, no
wisdom of developed-economy
experience that proves that such
a system would actually keep
overall costs low and prevent too
many people from being shut out
of insurance markets.
That end would look like one
of the more plausible conservative
alternatives to Obamacare: a
subsidy to cover the cost of a cata-
strophic health insurance plan, plus
a directly funded health savings
account to cover primary care.
This system could be layered on
top of the existing Medicaid expan-
sion, replacing only the Obamacare
subsidies and exchanges, or it could
replace the Medicaid expansion
as well, offering the poor and near
poor the same “catastrophic insur-
ance plus a subsidy” as everyone
else in the individual market. Either
way the individual mandate would
disappear, but people would be
auto-enrolled in a catastrophic plan
(with the option to opt out), mean-
ing that coverage would be nearly
universal (thus fulfilling one of
President Donald Trump’s various
promises) even though its benefits
would be less comprehensive than
Obamacare’s.
Taken as a whole, this approach
distills both the promise and the
peril of conservative health care
policy. The promise is that by
having people pay for more of
their health care in cash and by
giving them more freedom in what
plans they’re allowed to buy, you
would end up with less spending,
lower prices and less cost inflation.
(And you wouldn’t need the heavy,
innovation-squashing price controls
that single-payer systems use to get
there.)
The peril is that there would
be too wide a gap between what
the money in your health savings
account covers and what you need
before your catastrophic coverage
kicks in. In which case many people
with consistent health care costs
for chronic problems would rack
up impossible medical bills in short
order.
Conservatives who want this
model to replace Obamacare nation-
wide believe that the promise out-
weighs the risk — and this is, again,
a reasonable belief. But it’s also a
belief that hasn’t been tested on any
kind of sweeping, economywide
scale. And this is the advantage of
Cassidy-Collins: It encourages gov-
ernors and legislators to actually put
the conservative theory of health
care to the test without simply
reversing the ideological colors of
the great Obamacare experiment
and immediately turning the entire
U.S. health care system over to the
right’s technocratic vision.
Of course this would mean that
Obamacare’s existing problems
would persist in the states where it
continues. But those problems —
the rise in premiums, the fleeing
insurers, the risk of a death spiral
downstream — are not equally
problematic in every state, and they
are not fiscally dangerous, as yet, on
the scale that many conservatives
initially feared.
As the conservative policy
thinker Yuval Levin wrote late
last year, the striking thing about
Obamacare to date is how much
smaller than expected its effect
on the overall health care system
has been. Fewer people are being
insured on the exchanges than
liberals hoped, fewer employers are
dumping high-cost employees onto
the exchanges than conservatives
feared, and as a result, he writes:
“The extremely serious problems
we are seeing now are within the
one system that Obamacare created
from scratch, the exchange system.
That system may not survive, and
its condition has a lot to teach us
about the problems with liberal
health economics. But it is a much
smaller system than anyone thought
it would be at this point, about half
the size that CBO projected, so that
the effects of any failure it suffers
are likely to be more contained than
anyone might have expected.”
This containment means that
conservatives have room and
time to be more patient, cautious
and experimental than were the
Obama Democrats before them. If
the Obamacare exchanges aren’t
ultimately going to work out, then
allowing them to persist in liberal
states while an alternative system
gets set up in red states is a reason-
able way to gradually transition
from the liberal model toward the
conservative one. If the right’s
wonks are right about health policy,
the Cassidy-Collins approach
should — gradually — enable con-
servatives to prove it.
And if the right is wrong, if
its model doesn’t match reality,
if people are simply miserable as
health care consumers because the
system has too much of Friedman
and not enough of Burke — well,
in that case both the country and
conservatism will be better off if
we learn that via a voter rebellion in
10 right-leaning states, rather than
through a much more widespread
backlash against a nationwide
health-insurance failure. (Which is
something a president with a high
self-regard and poor approval rat-
ings might have a particular reason
to avoid.)
Between this reasonable case
and legislative reality, of course,
falls a variety of shadows. But more
than for the various repeal-and-re-
place alternatives? I’m not so sure.
Right now the Cassidy-Collins
compromise has few enthusiastic
backers. In a few months, however,
it might turn into conservative
health care reform’s best hope.