Suppose someone told you that for just two cents on the national dollar we could have a country where everyone had health insurance, full-time workers earned a living wage, poor children had great teachers in fixed-up schools, and politicians no longer had to grovel to wealthy donors. And suppose that when we were done, government would still be smaller than it was when Ronald Reagan was president. If you're like most people, you'd probably think that for two cents on the dollar this sounds like an intriguing deal. But 2 percent of America's GDP is more than 200 billion a year--way beyond what politicians in Washington think is possible.
Between our proper intuition that 2 percent is a small amount, and the Washington consensus that a 2 percent shift in priorities is beyond imagining, lies the opportunity to transform American politics. In this agenda-setting book, Matthew Miller challenges our country (and those who would lead it) to change the way we think about our public responsibilities before the baby boomers' retirement siphons all the money out of the system. The Two Percent Solution is a call to arms that no serious candidate, Republican or Democrat, can afford to ignore.
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The 2% SolutionFixing America's Problems in Ways Liberals and Conservatives Can Love
By Matthew Miller
PublicAffairsCopyright © 2005 Matthew Miller
All right reserved.
Chapter OneWE'RE NOT SERIOUS
What do we do when neither major party has a political strategy-that is, a strategy for winning power-that involves solving our biggest domestic problems? And when a looming demographic and fiscal collision means the time left to get serious is running out? That's the predicament we face today and if you haven't been encouraged to think of it in those terms, there's a reason. The illusion of action is Washington's oldest con. Barely a day goes by without a dozen new "plans" being unveiled to Save Something Good (the schools, the Everglades, Social Security) or Stop Something Evil (HMOs, trial lawyers, tobacco makers).
The reality, of course, is different. While the brands of deception vary, and intentions run the gamut from good to malign, the result of these bipartisan shenanigans is the same. Make-believe responses to national problems vie in a competition for votes that has almost nothing to do with solving the problem in question. The media ends up in cahoots with politicians in creating this illusion of meaningful action, both because (1) media norms don't allow reporters to say "this is a charade" even when they know it is (reporters are supposed to be "objective"), and because (2) for reporters to admit they are often tacit conspirators in such hoaxes cuts too close to the bone.
Look around: On the questions we'll be examining-health care, schools, wages, and campaign finance-there are few honest debates to be found. We'll get to how decent, intelligent people end up offering this disappointing gruel, but first it's important to establish that we are fundamentally not serious.
The Great Shrinking Health Care Debate
The most vivid illustration of today's lack of seriousness concerns health coverage, where our ambitions regarding the uninsured have shrunk dramatically in the last decade, even as the country grew wealthier and the problem got worse. To see what I mean, go back for a moment to the 2000 Democratic primary campaign, when Al Gore faced a challenge from Bill Bradley Bradley; to his credit, offered a serious $50-billion-a-year plan to expand health coverage to just about all of the 40 million uninsured Americans. Gore's plan was to insure only the 10 million or so uninsured children (a cheaper proposition since kids almost never get expensively sick the way older folks do). Gore blasted Bradley's plan as fiscally irresponsible, and the press dutifully cast the debate as a showdown between Bradley's pricey liberal dream and Gore's more modest, centrist approach. But here's what the press never figured out (and what the rest of us therefore didn't get to hear): Bradley's "liberal" plan to cover uninsured Americans was a slightly cheaper version of the proposal offered by President George Bush in 1992.
Every so often a fact emerges in politics that, in Copernican fashion, renders the settled view of the cosmos obsolete. So let's mull this for a minute. Both Bradley's plan and the 1992 Bush plan would have made it possible for families to buy private insurance via tax credits and deductions that tapered off as income rises. Both called for insurance market reforms to let folks participate in the larger risk pools that assure reasonable premiums. Bush's plan, adjusted for inflation, offered up to $5100 per year per family, slightly more generous than Bradley's scheme, which offered up to $5000.
Bush Sr. offered his plan after Harris Wofford's surprise healthcare-inspired win over Richard Thornburgh in Pennsylvania's special Senate race in 1991. With health care suddenly politically "hot," the White House needed a plan that addressed the problem on more market-friendly terms than Democrats were offering. Yet here's what is so stunning: At a time of $250 billion deficits, Bush put out a $50-billion-a-year plan (three times bigger than what Gore would offer in 2000) only to have Democrats bash it as "too little, too late." Fast forward eight years, and Bradley's plan, offered at a time of equally outsized surpluses, was damned as a liberal fantasy and trashed by Gore's team as evidence of a "reckless spending mentality."
But the ironies deepen. The current President George Bush, who campaigned as a "compassionate conservative," has offered the same kind of tax subsidy plan as his father but in embarrassing miniature-about $9 billion a year over the next ten years, which the White House figures will cover 6 million of the now 42 million uninsured (Bush Sr.'s plan covered 30 million out of 35 million uninsured).
Why have our leaders been content to let the problem worsen as our ability to address it has grown? The unflattering answer is because doing so is both safe and cheap. The rising roll call of today's uninsured is made up of low-income workers with little political voice; in the broad-based recession of the early 1990s, it was middle-class anxieties that got politicians scurrying to respond. Today's policy of rationing health coverage by income also saves money; while the uninsured do get taken care of in emergency rooms, county hospitals, and other sites of last resort, the absence of preventive care, regular checkups, and other services most people take for granted means these citizens consume just half as many health resources as their insured neighbors. We can only fix the problem of the uninsured by spending fresh money on people with little political clout, or by somehow disguising that this is what we're up to.
Any such attempt takes place in the shadow of the Clinton health care fiasco of 1993-1994. The political lesson both parties drew from that meltdown was that efforts to expand coverage must be "incremental." "Step by step" is the approved mantra.
Yet incremental "achievements" since 1994 have been a bust. Senators Edward Kennedy and Nancy Kassebaum passed a bill in 1996 hailed by both parties as a model for future health reform. The measure was supposed to assure continued access to insurance for those who changed or lost their jobs. But since insurers remained free to charge whatever they like in these situations, people quickly found that "access" meant nothing when policies might cost $15,000 a year. Similarly; a $5-billion-a-year plan for the nation's 10 million uninsured kids passed to great fanfare in 1997; aid was targeted with such narrow complexity, however, that even proponents say its impact has been to lower the percentage of poor children who lack coverage only modestly.
Meanwhile, as this trot through recent history suggests, the terms of reference in America's health care debate remain bizarre. Consider: In Great Britain, Margaret Thatcher would have been tossed from office if she'd proposed anything as radically conservative as Bill Clinton's health plan which still would have left several million people uncovered and had the private sector deliver the medicine. This comparison proves the bankruptcy of most ideological labeling in the health care debate, which is used by foes of expanded coverage to divert the media and sink serious attempts to remedy the problem.
The Institute of Medicine estimates that 18,000 people die prematurely each year owing to lack of health coverage, the equivalent of the Vietnam War's death toll every three years. The uninsured get preventable diseases and are avoidably hospitalized more often than the insured, and are vulnerable to devastating financial loss from illness in ways unthinkable in other advanced nations. All this is widely known. While it is encouraging that several Democratic presidential contenders are at last beginning to talk more ambitiously; how can it be that America will enter the 2004 election season having gone a full decade without any serious attempt to address the plight of more than 40 million uninsured citizens?
If we were starting from scratch, after all, no one would urge us to ration vaccinations and checkups for children based on their parents' ability to pay-yet that's been national policy for decades. No villainous HMO would ever deny timely preventive care to its members the way our nation does to millions of its uninsured-yet that is America's officially sanctioned method of cost control. "The politically dominant thought in this country," said Uwe Reinhardt, a health economist at Princeton University, "appears to have been that the deprivation and suffering of several million Americans, albeit regrettable, nevertheless is a price well worth paying for the good economic fortune that our health system bestows on so many, and for the rapid technical progress that a less fettered system can sustain."
Leave No Teacher Crisis Honestly Addressed!
Washington politicians in both parties love to say they're for educational "testing" and "standards" and "accountability," but nearly every state had already adopted such systems before the feds congratulated themselves for adding another bureaucratic layer in the much-touted No Child Left Behind Act of 2001. But the new law largely punted on the teacher crisis in our poorest neighborhoods, which any serious attempt to leave no child behind would make its first priority. Indeed, this is one of the few things on which researchers across the political spectrum agree: Half of the achievement gap facing poor and minority students is due not to poverty or family conditions but to systematic differences in teacher quality. "Fifty years after Brown v. Board of Education," Alan Bersin, the superintendent of schools in San Diego, told me, "the maldistribution of quality instruction is the key determinant of underachievement in large urban school systems." Despite lofty pledges, our latest "education president," and the Democrats assailing him, are shooting blanks.
Start with President Bush. His No Child Left Behind Act tells states "thou shalt have a quality teacher in every classroom" by the end of the 2005-2006 school year. But this command can't change the facts of life in poor urban and rural districts. Republicans would ordinarily recognize this as a question of market economics-the supply of good teachers who will work in difficult conditions with challenging children isn't adequate at prevailing salaries. "They may as well have decreed that pigs can fly," Wayne Johnson, who runs California's teachers union, has said. California and other states have tried to wiggle out of this unfunded mandate. Not that they're proud of this, for who wants to admit that they can't scare up enough decent teachers for the kids who need them most? But if forced to comply, and stick only with teachers who pass muster under normal definitions of "qualified," class sizes in the toughest districts could rise to 50 or 60. In the triage environment of urban schools, this route is almost certain to make matters worse.
It's hard to imagine a more demoralizing presidential dodge: Mandate the politically appealing result (and take credit for having addressed the problem) while offering no cash to poor districts to make it a reality. Then, to add insult to injury, make the penalty for noncompliance a cut in existing federal funding, putting the goal even more beyond reach than it is today!
But that spirit captures the symbolic nature of Bush's entire education agenda. Republicans love it because its pseudo seriousness and media appeal neutralizes the traditional advantage Democrats have enjoyed on the schools issue, while its no-cost emphasis on testing and accountability doesn't divert money from the tax cuts they want. The GOP knows that poor districts lack the tax base to do more on their own. Yet they hide behind lofty-sounding commitments to "federalism" and "local control" to justify denying poor schoolchildren federal cash that might make a difference.
Bush's other teacher quality "initiatives" similarly fail the seriousness test. Because of coming retirements and rising enrollments, 2 million teachers must be recruited over the next decade. It's either a crisis or opportunity, depending on how the nation handles it. Laura Bush, a former teacher herself, is a wonderful voice to lead this crusade. By all accounts she brings sincerity and passion to the cause. But the symbolic "agenda" the White House has cooked up for her is laughably unequal to the challenge.
Mrs. Bush first touts "Teach for America," which brings graduates from elite universities into inner-city classrooms for a few years, and turns them into lifelong advocates for schooling. It's a fabulous program. But its scale doesn't begin to deal with the magnitude of the teacher gap. In its first eleven years it recruited a total of 6000 teachers. But America now needs to recruit 6000 teachers every eleven days. Program founder Wendy Kopp, who is grateful for the White House's support, doesn't pretend otherwise. "We're not at all the answer to the broader problem," she told me.
Then there's Mrs. Bush's other pet program, "Troops to Teachers," which helps military personnel move to the classroom when they leave the service. Again, it's a great idea, but it delivers only about 650 teachers a year. We need 200,000 a year. Mrs. Bush's big push has been to raise funding for "Troops to Teachers" toward $30 million a year from $3 million. If you're the White House, you boast of the "tenfold increase." If you pull out a calculator, you'll figure out that at today's rate it would take 300 years for the Bush administration to recruit enough veterans to fill the teaching gap we face over the next decade.
The average teacher, despite low pay, spends about $500 a year out of his or her own pocket for classroom supplies. The president's response to this shameful burden: a tax deduction under which some teachers can deduct a portion of the money they've spent for these purposes. Sounds nice at first, but on reflection it's an absurd half-measure. Would Bush offer soldiers a tax deduction for ammunition they had to buy out of their own pockets-or would he insist that they have the equipment and resources to do their jobs right?
Bush might say that when it comes to schooling, money isn't everything, and he'd be right. But how about when it comes to creating incentives for young Americans to enter a teaching profession where the starting salary now averages $30,000 and rises to only $44,000?
Every free-market fan knows that you get what you pay for. When the affluent suburb of Scarsdale, New York, pays teachers with a masters degree and five years of teaching more than $60,000, and New York City pays her counterpart in the 40s, is there really a question about where most of the top talent goes? Given this context, it's hard to see Bush's deeds as being anything but a moral mockery of his words.
Democrats have predictably been willing to spend more money on the teacher challenge, but their "plans," too, have been more symbol than cure.
Excerpted from The 2% Solution by Matthew Miller Copyright © 2005 by Matthew Miller. Excerpted by permission.
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