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An Open Letter to Paul Krugman

02/04/2008 07:03 pm ET | Updated May 25, 2011

Dear Professor Krugman,

I think you are a terrific economist and a terrific writer. Over the years, I have made hundreds of students buy your microeconomics textbook.

We have some disagreements about health policy. You have been lambasting Senator Obama for months now because he fails to propose an individual mandate. I support Senator Obama, though I in no way represent the Obama campaign.

In your view, the Obama plan will fall far short of universal coverage. In fact, both the Obama and Clinton plans will leave some millions of Americans uncovered, though both plans will cover many of the 47 million people who are now uninsured. Both plans will also address many serious failures and human tragedies that arise within our current healthcare system, and would put us miles ahead of where we are now.

No one can say how close these plans will come to universal coverage, because the devil is in the political and administrative details--details likely to be set by a future Congress negotiating with the next president.

In this morning's column, you cite a new working paper by Jonathan Gruber which supports the mandate concept. Anything that Professor Gruber writes deserves to be taken very seriously. It is, however, important to clarify that he does not specifically examine either the Obama or (especially) the Clinton plan.

In his policy simulations, Professor Gruber writes: "In particular I assume that 95% of those who would not voluntarily choose to insure are forced to insure through the mandate." This is not the Clinton plan. It is not even a "Clinton-type plan," as you prefer to say. Almost by definition, a near-perfect mandate will increase the number of people covered under any proposed health plan. Whether this nation actually would support such stringent policies is another matter. Here you presume precisely what is most in doubt.

Today's Times notes that "Massachusetts, the only state with an insurance mandate, has thus far failed to enroll nearly half of its uninsured despite imposing a modest first-year tax penalty of $219." Massachusetts will probably do better this year, because the penalties have stiffened. As I understand it, individuals are liable for half the premiums even if they are uninsured. Massachusetts provides a remarkably favorable political, economic, and administrative environment to attempt such a mandate. This is the best-case scenario, and it is not easy.

As a volunteer for the Obama campaign, I have called many primary voters. They sometimes ask about the mandate issue. Whatever health policy researchers believe, my sense from these conversations is that even core Democratic party voters don't much like mandates.

Senator Clinton's own equivocation illustrates the political dilemma. In criticizing Senator Obama, she happily takes credit for high levels of coverage. Yet she is wary in describing how she would bring this about. Today's New York Times has a story entitled "In Health Debate, Clinton Remains Vague on Penalties." It is certainly unclear that her proposed health plan comes anywhere near the near-perfect takeup and enforcement presumed by Professor Gruber, or that legislators and voters would support such policies. If Senator Clinton is nominated, Republicans will press this argument hard come November and beyond.

You are on more solid ground regarding the limitations of subsidies in achieving universal coverage. Professor Gruber notes that an important group of people--some but not all of low-income--will resist buying subsidized coverage. In the last debate, Senator Obama noted strategies to deter free-riding. This certainly merits debate, and merits comparison with what Senator Clinton actually proposes rather than a 95% perfect hypothetical plan.

More generally, you assert that Senator Obama is a less progressive candidate than Hillary Clinton because he has stopped short of imposing the individual mandate. This is a very sweeping judgment based on one political and policy calculation.

Your assessment makes an odd fit with Mr. Obama's policy view on Iraq and many other things. It runs counter to the thinking of many progressive organizations and people who have endorsed Senator Obama: MoveOn.org, Teddy Kennedy, and others. It runs counter to most tabulations of his legislative record, which often identify him as more progressive than Senator Clinton. It ignores many, many years of conscious, sometimes-justified triangulation by both Clintons regarding many social concerns.

I am puzzled by the shrillness of your columns about Obama, and your rather exclusive focus on individual mandates as the litmus test for a progressive politician.

Let's suppose, for the sake of argument, that everything you say is right. President Obama gets himself elected. He successfully enacts health reform, but he leaves out an individual mandate. Indeed, let's suppose that we later discover that too many people fail to buy insurance coverage or try to free-ride. We would have to address these problems.

In the meanwhile, all we will have accomplished would be:

1. to bar insurers from denying coverage based on preexisting conditions;
2. to provide significant financial subsidies to millions of low-income people to help them buy coverage;
3. to prevent people from losing their homes because they are diagnosed with cancer;
4. to cover all children;
5. to make safety-net providers (and the local governments that run them) more financially secure because they no longer bear the burden of treating 47 million uninsured people.

I'd be pretty darned happy with this outcome--although I (like you) would ultimately prefer "Medicare for All" or some other version of a single-payer system.

Obama and Clinton supporters disagree on tactics and policy details. Politics and human nature being what they are, each side is angry because the other has thrown some fouls.

It's a tough campaign because there are two excellent candidates with similar policy views, and there can be only one winner. I suppose Obama people should not send mailings that attack mandates. I suppose Clinton people should not send mailings that say Obama will impose a $1 trillion tax increase on working families by raising the Social Security earnings cap. I suppose Bill Clinton should be quieter and stay out of trouble.

Hopefully this fight will burnish the eventual nominee and unite the Democratic Party. The fact is: We share the same values and ultimate goals. Whoever is nominated, we will need each other to win the general election and to enact Democratic proposals into law. So let's fight now, but let's tone things down a bit, too. We'll be on the same side a few months from now, or maybe sooner.