On two big issues - spending and health care - Democrats are strong

By Robert Kuttner, 07/20/99

epublican and Democratic strategists are again playing a game of legislative chicken, each hoping that the other will blink rather than coming up empty-handed when this year's congressional session ends.

The last time this happened and neither party blinked, the government briefly shut down.

This time the Democrats seem to be better positioned, despite the Republican majority in Congress, despite Clinton's impeachment and Vice President Al Gore's weak showing to date as the Democratic front-runner. The reason, for once, has to do with substance. The issues in contention simply play to Democratic strengths.

The first is health care. Less than half a decade after the Clinton health security plan suffered ignominious defeat, health care issues are again dominating public debate.

For lack of a national health insurance system, the United States relies on private managed care companies to constrain costs. Increasingly, managed care plans cut costs by coming between doctor and patient.

Managed care has entered the popular culture as a term of abuse. Last week's New Yorker magazine ran a cartoon of a campfire at a girls' summer camp, with the counselor saying, ''Very scary, Jennifer - does anyone else have an HMO horror story?''

The Republicans, with close ties to the insurance and pharmaceutical industries, have managed to put themselves on the unpopular side of this issue. Last Thursday, Senate Republicans blocked passage of a serious patients' bill of rights, passing instead a token bill that even House Republicans consider mere window dressing. By contrast, the Democrats proposed legislation with teeth - in the form of the right to sue an HMO that caused patient harm by countermanding the clinical recommendation of the doctor. The Republican bill covered only about 48 million Americans, while the Democrats' bill covered all 161 million Americans with private health insurance. The GOP has also resisted adding prescription drug benefits to Medicare, offering instead a new tax deduction for drug costs.

President Clinton has vowed to veto anything that looks like the Republican patients-rights bill. Democrats are torn between using their leverage to get a stronger bill and enjoying a nice election issue for the campaign in 2000.

The second issue is budgetary. Ordinarily, tax cuts are a sure political winner. In 1981, after Democrats were traumatized by President Reagan's victory, both parties got into a virtual bidding war to shred the tax code. The result was two decades of deficits and a quadrupling of the national debt.

Now the context for tax politics is a budget surplus. The Republicans want to hand out nearly a trillion dollars in tax cuts. The administration is willing to discuss a much smaller tax cut, maybe a quarter of that amount, and one that would be targeted to less affluent Americans rather than the rich.

But President Clinton wants to reserve most of the surplus for (gasp!) public spending. And it turns out that these spending programs are actually popular - Social Security, Medicare (including a new pharmaceutical benefit), and more outlays on children. Polls show that most voters consider a tax cut to be a fairly low priority.

As in the case of the patients' bill of rights, the tactical question is, who blinks first. Many strategists of both parties use the metaphor of a ''train wreck.'' Who wins and who loses if the budget process breaks down and no budget is approved? Republican tax writers, in particular, are betting that if the just hang tough, the president, seeking to avoid a year-end ''train wreck,'' will take most of their proposed tax break, and then share the credit, as he did with welfare reform.

But this time, the issues are cutting in Clinton's direction. The laissez-faire 1980s are history. The public mood now favors a measure of public regulation and public spending. Needed public outlay was shelved for two decades in the name of deficit-reduction. If we can't think about addressing popular national needs with public spending while the budget is in surplus, when can we?

Clinton and the Democrats have everything to gain by holding out for a tough patients-rights bill and the use of the budget surplus to shore up America's best supported uses of public outlay.

After all, three-quarters of the surplus is the result of projected cuts in other public spending.

Presumably, the Republicans remember that when the government was shut down four years ago for lack of a budget, it was they who ultimately blinked. Mark Twain once defined confidence as a Christian holding four aces. For the first time in memory, the Democrats hold a very nice hand. It remains to be seen whether the Republicans can bluff them into folding prematurely.

Robert Kuttner is co-editor of The American Prospect. His column appears regularly in the Globe.