The Republicans Continue Their Long March Over the Cliff

One problem with Republicans: They've got the wrong Mitch

By Steven Pearlstein -- Indianapolis

Friday, December 11, 2009 -- The Washington Post:

Earlier this week, I found myself in the majestic office of Indiana's diminutive governor, Mitch Daniels, talking about health care.

Daniels is a rarity these days, an incredibly popular Republican politician who overcame last year's Democratic tide in his state to win a second term as governor with nearly 60 percent of the vote. His Republican pedigree includes service to Indiana Sen. Richard Lugar and Ronald Reagan before being named director of the Office of Management and Budget in George W. Bush's first cabinet. His belief in free markets, and dislike of high taxes and regulation, puts him squarely in the conservative camp.

On this day, Daniels is describing how, in his first term, he won bipartisan support for a program known as Healthy Indiana, which provides health insurance for Hoosiers who aren't poor enough to qualify for Medicaid but earn too little to afford buying coverage for themselves. So far, 50,000 residents have signed up for the program, under which the state contributes up to $1,100 each year to each enrollee's individual health savings account. Participants also contribute according to their income, and when the account is depleted, a catastrophic insurance plan kicks in to cover any additional expenses. It's all paid for with a portion of the state's Medicaid funds, along with an increase in the cigarette tax that Daniels pushed through a reluctant legislature.

In fact, Daniels is such a believer in health savings accounts and consumer-directed health plans that he made sure one was offered to state employees. So far, he reports, 70 percent of state workers have signed up -- including himself -- saving millions of dollars each year for themselves and taxpayers.

As he's talking, a thought suddenly occurs to me: They've got the wrong Mitch! Instead of relying on Mitch McConnell to lead Senate Republicans into battle over health care (or anything else, for that matter), they should have turned to Daniels instead.

The bad Mitch, as most Americans know by now, is the charmless and shameless hypocrite who offers up a steady stream of stale ideology and snarky talking points but almost never a constructive idea. McConnell has decided that the only way for Republicans to win is for President Obama to lose, and he will use lies, threats and all manner of parliamentary subterfuge to obstruct the president's programs.

The good Mitch, by contrast, is a principled but practical conservative who respects the intelligence of voters and would rather get something done than score political points. Daniels is a genuine fiscal conservative who took a $600 million state budget deficit and turned it into a $1 billion surplus but managed to do so without cutting spending for education and even increased funding for child welfare services. He pushed hard to lower property taxes but didn't hesitate to propose temporary hikes in income and sales taxes to keep the state in the black. He privatized the state's toll road and then used the $4 billion proceeds to launch a major public works investment program.

Tellingly, both Mitches like to talk about the Department of Motor Vehicles. The Washington Mitch conjures the image of long lines and uncaring bureaucrats and asks, cynically, whether you want folks like that determining your medical care. The Indiana Mitch, by contrast, rolled up his sleeves and transformed his DMV into an efficient, consumer-friendly operation.

One can only imagine how Republicans could have reshaped health-reform legislation in the Senate if it had been Mitch Daniels rather than Mitch McConnell running the show, striking deals with the White House and moderate Democrats to win concessions in exchange for a pledge not to filibuster.

Without question, they could have won more deficit-reducing cost savings in the Medicare program by setting limits on spending growth and reforming the way health care is organized, provided and paid for.

And they could have begun to realize their goal of "consumer-driven health care" by insisting that the new insurance exchanges offer at least one plan built around individual health savings accounts and catastrophic coverage.

They could have greatly limited the mandate for small businesses to offer health benefits while giving big businesses the option of turning the management of their health benefit programs over to the government-sponsored exchanges.

They could have taken a page from John McCain's platform and insisted on replacing the current tax exclusion of health-care benefits with a flat tax credit that would be more progressive and put downward pressure on insurance premiums.

My guess is that Republicans might even have won some reasonable limits on malpractice awards and set up a quicker, fairer mechanism outside the courts for resolving disputes between patients and doctors.

And, of course, they could have taken the "public option" off the Senate table, once and for all.

But McConnell would have none of it. For months, he has not only refused to collaborate seriously on a bipartisan bill, but also threatened any moderates who dared to try with political excommunication. And the Republican party -- along with the country -- is likely to come out the losers as a result.

In a prescient speech earlier this year in Washington, the governor of Indiana told a group of fellow conservatives that they could not regain the trust of the American people unless they accepted gracefully their new role as the loyal opposition and learned to root for the success of the country and its political institutions. The question now facing Republicans is whether they are willing to follow Indiana Mitch and become a vital and active part of the solution, or continue to follow Washington Mitch off the political cliff.