What Price Victory?

President Obama and his Democratic colleagues in Congress are celebrating the passage of a health care bill, heedless of the wound that their struggle has inflicted on the United States. The ugly battle has cost the president his popularity and his credibility, and has undermined the country’s confidence in our legislative process. It has distracted from efforts to right our economic ship and put our citizens back to work. Worst of all, just as Baby Boomers came to distrust government during the Vietnam War, so will a new generation now be forever skeptical of our country’s body politic.

Did President Obama ever have doubts? Did those protesters heckling his motorcade or taunting members of Congress penetrate that shield of self-assurance? Did voters who spurned his candidates in recent elections jiggle his equanimity? Who knows? Certainly he did not, perhaps could not, allow himself to waiver. Instead, Obama became so dug in on his quest to pass a health care bill that the impact of the conflict and the quality of the legislation became insignificant.

I have seen this before. As an analyst on Wall Street, I and my peers would occasionally find ourselves on the wrong side of a stock recommendation. Given our influence, changing an opinion could have serious consequences; it was not easy to lurch from “buy” to “sell.” We could get locked in, knowing that the ground under us was eroding as facts and prospects changed. The longer it went on, the more we forged fact from fantasy and plugged the holes in our arguments with doughy generalizations. I remember the look -- that look of bulldog certainty – on the faces of analysts holding fast to a losing proposition.

President Obama has had that look for months. He must know that this bill is a dud. It contains no real reform of the inefficient way medical treatments are charged to consumers and insurers, the ultimate source of spiraling costs. The projected fiscal benefits are bogus; honest analysis shows that the legislation will add to our deficit and drive up medical costs. No sane person can possibly imagine that we will provide medical care for an additional 30 million people without straining our health care infrastructure and pushing prices of doctor visits and medicines higher. Responsible people who have championed this bill have willfully ignored the fiscal tomfoolery because they believe passionately that we should have universal health care in this wealthy country. In their view that is justification enough for this bitter year-long battle.

The full consequences of the health care bill will become visible over time. I doubt they will be positive; most likely the expense will vastly exceed expectations, as was the case for Social Security and Medicare. Let us hope the legislation will eventually be changed to incorporate ideas that could actually lower costs, such as assuring that people have some “skin in the game” in their health care expenditures. Doubtless there will be subtle rationing in treatments; the country’s aging population more or less guarantees that process in any case. Overall, though certainly it will help those without coverage today, the bill just passed will likely mean less satisfactory health care for the majority of Americans.

The consequences near term are hard to gauge. The country is still trying to recover from a terrible financial crisis; millions are out of work and the last readings on consumer confidence were not encouraging. The health care bill will add to our tax burden and raise the cost of hiring workers. It has used up much of the federal government’s incremental taxing capacity. At the same time, states and cities across the country face crippling fiscal deficits that will also necessitate higher taxes and may lead to public sector layoffs. These challenges are not simple; political leaders will need widespread support from voters to make tough decisions. There will need to be sacrifices. Unfortunately, the country is not in a compliant mood. The bitter battle has drawn hard lines in the political sand – ironic for a president who campaigned on a promise to reduce partisan frictions.

Was it worth it? Boosters laud passage of the health care bill as an historic event. Yes, it is – and so was the Charge of the Light Brigade.

Liz Peek is a financial columnist and frequent Fox Forum contributor.

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