How GOP could make health care deal with Democrats

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Posted: Jul 9, 2017 5:22 PM EDT

By Julian Zelizer

CNN Political Analyst

Editor's note: Julian Zelizer, a history and public affairs professor at Princeton University and a CNN political analyst, is the author of "The Fierce Urgency of Now: Lyndon Johnson, Congress, and the Battle for the Great Society." He's co-host of the "Politics & Polls" podcast. The opinions expressed in this commentary are his own.

(CNN) -- Senate Majority Leader Mitch McConnell surprised the White House and many Republicans last week when he floated the idea that his party might end up working with Democrats if they fail to repeal and replace the Affordable Care Act.

McConnell's words sound like more of a threat than a promise, particularly to intransigent Republicans who might fear that a bipartisan bill would be far less palatable to them and to the GOP base.

But let's imagine there is something to McConnell's idea. What if he is able and willing to mobilize a coalition of Democrats and moderate Republicans such as Senator Susan Collins to fix the Affordable Care Act through subsidies and other reforms that stabilize the health insurance markets?

It has happened before.

Reagan and Social Security

One of President Ronald Reagan's biggest defeats early in his administration came on his proposal to cut Social Security benefits for early retirees. When he included this measure in his budget, congressional Democrats snapped to attention. Dejected after Reagan's 1980 victory over President Jimmy Carter, Democrats criticized Reagan for trying to slash the benefits that elderly Americans depended on.

But Reagan didn't back away forever. In 1982, Social Security was back on the agenda when experts warned that Franklin Delano Roosevelt's greatest legacy faced a massive budgetary imbalance in the near term that threatened the program. The government would be spending more on benefits every month than it was raising through payroll taxes.

Reagan, still stinging from his defeat, established a bipartisan commission to offer recommendations about how to fix the program. Reagan appointed Alan Greenspan to serve as the chairman of the 15-person commission. The panel, which had more Republicans than Democrats, reviewed every possible solution. Democrats like Claude Pepper of Florida warned that the commission was stacked with conservatives and would not produce anything that his side could accept.

And other Democrats warned that the commission would have trouble making recommendations that were acceptable to their party. After all, the GOP was the party of Reagan, who had repeatedly expressed his opposition to the basic structure of Social Security, as well as Medicare.

In the 1982 midterm elections that took place while the commission met, many House Democrats -- who picked up 26 seats -- ran on the saying that, "It's not fair . . . It's Republican" in reference to the Social Security plan and other conservative domestic policies. Democrats handed out bumper stickers that read, "Save Social Security -- vote Democratic."

The commission came back with a recommendation to put the program on sound footing. The report "rejected proposals to make the Social Security program a voluntary one." But there were concerns that partisan pressures would sink the commission's recommendations.

Greenspan's panel proposed increasing Social Security revenues by taxing a larger number of employees, accelerating tax rates, taxing some Social Security benefits, delaying cost of living adjustments and more. Reagan expressed his support for their recommendations, saying, "Well, sometimes, even here in Washington, the cynics are wrong. Through compromise and cooperation, the members of the commission overcame their differences."

Dole and Moynihan

Senate Majority Leader Robert Dole, the stalwart conservative from Kansas, had made a number of statements indicating his support for modest reforms to save the program, including an op-ed in The New York Times published on January 3.

Dole argued that "Through a combination of relatively modest steps, including some acceleration of already scheduled taxes and some reduction in the rate of future benefit increases, the system can be saved." He added that "When it is, much of the credit, rightfully, will belong to this President and his party."

Democratic Senator Patrick Moynihan of New York, who was on the commission with Dole and had just been sworn in to a second term, was energized by Dole's op-ed. Moynihan approached Dole on the Senate floor and asked: "Are we going to let this commission die without giving it one more try?" The op-ed was crucial to Moynihan, who recalled that until that point Republicans "were talking about scrapping the system."

White House Chief of Staff James Baker organized a "gang of five" (also called the "gang of nine" for those who included the four White House staffers who participated) with members from both parties who entered into an intense, secretive set of meetings to find a resolution. Hardly "anyone expected the negotiations to succeed," according to the Times given the intensity of partisan division.

Their meetings were conducted behind closed doors, leaving some to fear the kind of wheeling and dealing that was taking place. In his classic account of the reforms, "Artful Work: The Politics of Social Security Reform," political scientist Paul Light wrote that the closed-door negotiations were essential to success so that members could make "painful choices" on key issues.

Other than a long break on January 8 to watch the Washington Redskins compete in the NFL playoffs, the negotiations were nonstop. In the end, both sides agreed that the final deal had to inflict some political pain on both parties -- that was the only way it could work. They reached a deal on January 15.

The administration found support from such congressional Democrats as Speaker Tip O'Neill who was eager to join the president in this effort to save a key part of the social safety net.

Congress eventually passed legislation that raised the payroll tax, raised the retirement age from 65 to 67, delayed the cost of living adjustment for six months and required government workers to pay for Social Security. The Social Security Amendments of 1983, a $168 billion package, remain a landmark moment in the history of the program. It made the program solvent for several more decades.

Reagan said the legislation "demonstrates for all time our nation's ironclad commitment to Social Security." He continued, "It assures the elderly that America will always keep the promises made in troubled times a half a century ago. It assures those who are still working that they, too, have a pact with the future."

The health care impasse

In 2017, repeating this success with health care seems almost inconceivable. The polarization in Washington has become so much worse that it is hard to imagine the two parties coming together on any issue of this significance.

House Republicans who are part of the Freedom Caucus and their allies in the Senate will have little appetite to join Democrats on any initiative. Shifting to the center feels to them like the ultimate act of political betrayal. Any Republican willing to sign on to such a deal would face great political risks back home. Repealing Obamacare has been so important symbolically that compromising on this question could be politically disastrous for Republican members of Congress.

Democrats will likewise have little appetite to hand President Trump a victory of this sort. The utter failure of Republicans to deliver on repealing the ACA, with the realization that much of the program is far more popular than conservatives believed it to be, has been one of the main rallying points for the Democratic Party. Continuing to hammer away on this issue, rather than giving Republicans a victory, could be critical to success in the 2018 election, allowing them to both save the program and regain control of the House. So why compromise right now?

And both parties must grapple with the reality that millions of Americans who now have health coverage are likely facing rising costs.

Yet maybe the politics will move Washington in the most unexpected of directions. Perhaps McConnell will see that bipartisanship might in fact offer his party the best way to save itself on health care and to move on to more appetizing issues, such as cutting taxes for business and investors. This could be a legacy-making moment for him as a congressional leader, even if there are big short-term political costs.

What a deal could mean

For Trump, it could allow him to finally claim a domestic victory and give some credence to the notion that he is a maverick. Should he defy the conservative Republicans, he might come out of this with more leverage to move the party on other issues.

Democrats could break the lock that Tea Party Republicans have had on Capitol Hill since 2010 and create a precedent for other sorts of alliances, such as a deal on rebuilding infrastructure, that go against the conventional wisdom. Republicans who locked in march step with the conservative caucus would know that the possibility of bipartisanship was a real option.

Democrats face the real risk that if gridlock prevents Congress from fixing the program, the costs of premiums will continue to rise and more insurers will pull out of health care markets, leaving the party to shoulder the responsibility of these problems. Instead, through a deal, the Democrats could come out of this bruising battle with a new and improved ACA.

In entering this alliance, they could save a health care program that is central to their party's recent rule, and offer ongoing evidence -- in the midterms and the next presidential election -- of what they can accomplish when they are in power.

The President could immediately generate some good press coverage by creating a bipartisan commission to offer recommendations for fixing the ACA.

The odds of any of this happening are slim. Intense partisan polarization is not some imaginary force in national politics -- it defines our era.

Yet every now and then, as the nation saw in 1983, both parties can find a way to join hands with the opposition in ways that benefit both of their interests and help citizens achieve more security in their lives.

The-CNN-Wire