By Robert Waldmann
Paul Krugman writes
Max Baucus — Max Baucus! — is leading the charge on a health care plan that, at least at first read, is more like Hillary Clinton’s than Barack Obama’s; that is, it looks like an attempt at full universality. (The word I hear, by the way, is that Obama’s opposition to mandates was tactical politics, not conviction — so he may well be prepared to do the right thing now that the election is won.)
“Tactical politics” indeed and not just for the election. The problem with Obama’s proposa (as you have noted) is that it would create a huge free rider problem which would send the health insurance companies down the death spiral. I’d say that Baucus is, as usual, balancing his desire to improve the world and his desire to serve the health insurance companies whose number 1 priority is a mandate (it is their officially stated condition for supporting reform).
By proposing a plan which would be terrrible, because it would bankrupt the insurance companies, Obama has them begging for the Clinton plan.
They report that the health insurance trade association will support reform only if there is a mandate.
When bargaining it is useful to start with a proposal which scares the counter-parties. The health care proposal with only advantages for most people (until the system collapses) and huge costs for health insurance companies scared the insurance companies into begging for the Clinton plan. I don’t care if it was Luck or genius.
There is certainly no reason to have expected Baucus to side with Obama against Clinton, Edwards and the insurance industry.
update: In contrast, Yglesias gets it.