Whenever I’m low on topics, I just check out what Bryan Caplan has to say on things.  I generally end up running about 55-65% in agreement with him, but since the man’s smart as all get-out and comes up with lots of ideas, he always gives you something to think about.

Recently, he had a post about the extent to which political posturing is cheap talk.  Caplan argues that the two major parties in the US really aren’t _that_ different from one another in terms of actions, and the differences in partisan rhetoric act as a catharsis for people further away from the median.  This is an interesting idea, but I think it has a huge flaw which Caplan covers up in his labels:  “Republicans” and “Democrats” aren’t all the same.  Over the past three decades, we’ve seen a shift in political movements, with the trend basically being that the center-left and left-wing Republicans (think the old Rockefeller types or McCarthy/LaFolette Progressives) becoming Democrats and center-right and right-wing Democrats (Zell Miller, most of the South) shifting over to becoming Republicans, so our political parties do come closer to matching up ideologically.  But even then, you’re making a huge mistake if you think that “Republican” means “right-wing” or (to a much smaller extent) Democrat means “left-wing.”  Caplan’s argument is that if Republicans and Democrats really meant their rhetoric, we would see more extreme legislation than we do; because they don’t, they obviously don’t really mean their rhetoric and are using it as an election device.  I, however, don’t quite buy that entirely.  There’s the old adage that Democrats campaign like Republicans and Republicans campaign like libertarians, and I will buy that in general (after all, “liberal” is a dirty word in American politics and very few politicians outside of the west coast and New England would ever willingly call themselves left-wing), but something that you have to remember is that neither side really enough members to pass most contentious legislation.

Just for an example, take a look at the 2007 Senate, according to the American Conservative Union.  In this Senate, there are 55 Senators with a lifetime rating over 20 (6 Democrats and all 49 Republicans).  There are 39 Senators with a rating over 75 (all Republicans).  In other words, there are 10 Republican Senators who really aren’t conservatives.  Folks like Susan Collins, Olympia Snowe, Arlen Specter, and cryin’ George Voinovich don’t even run as conservatives, and then you have Ted Stevens, who’s a centrist Republican with his hands in the pork barrel.  At the very edge of 75 are people like Richard Shelby (74.7), Lisa Murkowski (73.07), Richard Lugar (78), and Pete Domenici (74.41).  Those are the people most likely to follow Caplan’s argument:  they generally come off as conservatives and vote enough like conservatives to keep a serious challenger from the right away.

Let’s drop back a couple of years further, to the year 2005.  This was the recent Republican high tide and President Bush tried to push along Social Security reform, but it died in Congress.  Caplan’s argument is that such reforms die because Congress is essentially centrist but acts political.  On the other hand, my argument is that conservatives never really had a chance.  Even though Republicans held 55 of the 100 Senate seats, the following Republicans had career ACU ratings at or under 75:

  1. Richard Shelby (74)
  2. Ted Stevens (64)
  3. Olympia Snowe (50)
  4. Susan Collins (55)
  5. Pete Domenici (74)
  6. Gordon Smith (75)
  7. Arlen Specter (45)
  8. Lincoln Chafee (37)

This list does not include luminaries such as George Voinovich (77), Mike DeWine (80; he probably wasn’t as bad as I think, but certainly wasn’t any good…), Judd Gregg (79), Norm Coleman (78), and Richard Lugar (79).  In other words, of the 55 Republians, a strongly conservative bill had the support of roughly 45 Republicans.  Add in a couple of Democrats (the two Nelsons would be the easiest choices, but Salazar, Pryor, sometimes Evan Bayh or Mary Landrieu) and you’re close to 50…but for any important legislation, you effectively need 60 votes.  And the stronger the legislation, the more likely you are to have most of those 13 flipping Republican Senators oppose (or at least not support) it.

In the end, I’m willing to agree with Caplan to an extent:  politicians often promise more than they can deliver, and the fact that they do this consistently does turn into cheap talk and base-placating, at least somewhat.  But at the same time, I would say that my argument also has a great deal of validity, particularly in the Senate (and especially on the Republican side):  it’s hard to get party unity on contentious bills and party members are not all the same.  A large number of Republican Senators are solidly conservative, and an even larger percentage of Democratic Senators are solidly liberal, but neither side can muster 50—much less 60—so politicians who really do want to make drastic changes find themselves unable to do so.  Incidentally, I rather like this, as it means things are less likely to get screwed up even worse…


Health Care In The (Near) Future

Arnold Kling brings up a good point (through a Washington Post news article):  there is a major problem with Medicaid right now and Medicare isn’t too far behind.  I’ll try to skip most of the gory details regarding Medicaid, as I deal with it just enough to know them but not enough to want to explain them…

Basically, a nice starting point for “when it all started going downhill” was the tobacco settlements.  The Attorneys General who sued tobacco companies ended up splitting some great settlements and many of the states decided that they would use at least some of this money to fund sundry treatment programs in their states.  Their super-smart idea was that, because the tobacco settlement sources are not federal funds, third-party providers could provide services to Medicaid-eligible clients and the states would pay for these services using tobacco settlement funds and then apply to get their ~60%* back from the federal government for Medicaid reimbursement.  By doing this, that 60% can then be re-used to pay for other Medicaid clients, so you can get 60% of the 60%, or an additional 36%.  Keep going and you eventually end up with a dollar spent providing about $2.15 in services.

The problem here is that the tobacco settlements and boom-time state government growth provided a significant stress on Medicaid reimbursement, and given that states try their hardest to maximize Medicaid-eligible funding (it’s “free money” from the feds in that outputs aren’t tied to inputs, and if they don’t spend it, some other state will), there was a fairly big increase in Medicaid outlays.  Then came the not-as-good times.  Though we aren’t in a recession, things aren’t doing nearly as well as they were in, say, 2003 or 2004.  In addition, the later tobacco settlement dollars ended up being a bit less than anticipated.  Thus, several state budgets are feeling the pinch, so they’re cutting back on Medicaid services.  But because of the multiplier effect, there’s really no such thing as a “small cut” for providers of treatment services, as reducing state funds by $1 reduces available dollars for treatment by about $2.15.

There are additional factors involved as well, such as those listed in the Washington Post article (caps on what can be charged directly to Medicaid-eligible clients being the big one, as those liabilities are capped well below the market rate but providers can end up charging states above-market rates for Medicaid clients).  Kling’s point from all of this is that even though many politicians are talking about expanding governmental health care, the reality is that spending cuts are necessary and will happen.  Medicaid is already in trouble and Medicare will explode soon enough.

* – This percentage depends on lots of factors and can range anywhere between about 40% and roughly 75%.