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Delaying health benefits is a big risk

By Julian E. Zelizer, Special to CNN
  • Julian Zelizer: Lawmakers close to a deal on health care bill, but delaying the benefits is risky
  • Under House bill, most benefits won't kick in till 2013; under Senate bill, not till 2014
  • Zelizer tells how delay made Social Security nearly falter; repeal of a drug benefit program
  • He says after all the capital Democrats invested in health care, it would be a shame to win the battle but lose the war

Editor's note: Julian E. Zelizer is a professor of history and public affairs at Princeton University's Woodrow Wilson School. His new book, "Arsenal of Democracy: The Politics of National Security -- From World War II to the War on Terrorism" will be published in January by Basic Books. Zelizer writes widely about current events.

Princeton, New Jersey (CNN) -- We will find out in the next few weeks whether the Senate can pass a health care bill and if it can reach agreement with the House on the details. But if the two houses do pass legislation, one thing seems likely -- there will be a huge delay in starting most of the benefits.

Under the House bill, much of the program won't kick in until 2013. Under the proposed Senate bill, the date is 2014. This delay poses a political risk.

The design of public policies, the political scientist Eric Patashnik has argued in a new book, plays a key role in its success or failure. When pushing legislation of this magnitude it is important to have voters "buy-in" as quickly as possible so that the program can achieve stable footing.

If benefits are quickly distributed, the program will develop a political coalition that can protect it from attack. The delay in the current proposals will give opponents of health care reform substantial time to attack, right as Americans start to learn about the mandate they will face for purchasing health care.

Under the Senate bill, opponents will have a midterm (2010) and presidential election (2012) cycle to make their argument.

When programs have been delayed, they often encounter political problems. In 1935, Congress created Old Age Insurance, the program which today we call Social Security.

When programs have been delayed, they often encounter political problems.
--Julian Zelizer

According to the original plan, Congress would accumulate a surplus of funds to help pay for benefits, combined with a payroll tax. FDR insisted that the government would not start distributing benefits until 1940, while taxes would be collected three years earlier. In 1939, liberal and conservative opponents of this program pushed to eliminate the surplus. Because nobody was receiving benefits, the change was relatively easy to obtain.

Congress passed amendments in 1939 that broadened the number of people covered by OAI, but also deemed that the program would be paid for on a pay-as-you go basis. It allowed for the possibility of using general government revenue.

During World War II, Congress froze Social Security taxes while another federal program modeled on welfare, Old Age Assistance, proved to be much more popular and grew faster than OAI. In 1949, many policymakers were afraid that OAI would not survive.

Of course they were wrong. Social Security became one of the nation's biggest social policies. But in its first 15 years the program almost faltered.

A more devastating case of delay came with the passage of Medicare Catastrophic Coverage Act in 1988. The legislation offered Medicare recipients prescription drug benefits. Congress paid for the program by raising the Medicare Part B premium and imposing a supplemental premium on wealthy beneficiaries.

Congress slowly phased in benefits to be fiscally responsible by collecting tax money first. During that time, opponents mobilized.

In August 1989, Rostenkowski was confronted by 200 angry elderly protesters mobilized by the Illinois Public Action. The chairman had just finished speaking to a group at a senior's center in Chicago's North Side.

When Rostenkowski left the building, the protesters screamed at him: "Liar!" "Coward" and "Impeach!"

Before jumping in his Chevrolet, Rostenkowski said "These people are nuts," a statement captured on a microphone. The seniors surrounded his car as he attempted to escape. One woman jumped onto the hood. With his driver unable to move the vehicle, Rostenkowski bolted out of the car and walked away.

The car met him at a gas station nearby. The news networks played clips from the protest, embarrassing Rostenkowski and intensifying the public perception that there was widespread public anger about the legislation. Congress repealed the program in 1989.

An alternative policy design could be seen when President Lyndon Johnson and the Democratic Congress used for Medicare in 1965. Democrats were determined to get the program up and running within a year.

By July 1, 1966, over 19 million people were enrolled in the program. This was not an easy task.

As the historian Edward Berkowitz wrote, recipients needed to be informed and enrolled in the voluntary program, Medicare Part B; fiscal and administrative intermediaries had to coordinate with government officials to set up the organizational structure of Medicare; and the government needed to find out which hospitals qualified to participate in Medicare, a touchy issue since this included whether Southern hospitals were willing to comply with the Civil Rights Act of 1964.

The person in charge of the task, Social Security Administrator Robert Ball, recalled: "As I look back on it . . . I don't know how in the hell we did it, to tell you the truth."

The design of the health care proposals being considered by Congress should be changed. While the delay will result in some short-term savings and allow more time to get the program up and running, Democrats must consider the political dangers that will result from this decision.

Princeton Professor Paul Starr, one of the leading experts on health care, has proposed that the latest the program should start is January 2012. In The New York Times, he suggested that the federal government should offer financial incentives to states like Massachusetts that are willing and capable of putting some of the reforms into place sooner.

After all the political capital that Democrats have invested in this health care debate, it would be a shame if they were able to win the battle but, as a result of flawed policy design, lose the war.

The opinions expressed in this commentary are solely those of Julian Zelizer.