Factcheck.org has decided Barack Obama’s new argument about John McCain’s health care plan is misleading. National Review’s Ramesh Ponnuru agrees. And, since I made a similar argument about McCain's health plan here on Sunday, Ramesh criticizes me, too.
I respect both Factcheck and Ramesh, who is one of my favorite conservative writers. Here’s why I think they are mostly (though not completely) wrong.
At the center of this controversy is a quote, from a recent magazine article, in which McCain says the following:
Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.
After Paul Krugman blogged about that quote on Friday, numerous bloggers and eventually Obama himself seized on it as proof that McCain would bring deregulatory chaos to health care. “That’s right,” Obama said in North Carolina, “John McCain says he wants to do for health care what Washington has done for banking.” Later it appeared in an Obama ad, which is what drew Factcheck's scrutiny.
The Obama line works because of the timing: It’s happening in the middle of a major financial crisis brought on, in part, by lax regulation. But the problem with this argument, according to both Factcheck and Ramesh, is that McCain’s reference to “banking” had nothing whatsoever to do with Wall Street.
Instead, McCain was apparently referring specifically to regulations that allowed interstate banking--an innovation that made possible the proliferation of automatic teller machines (ATMs) we all now enjoy. “Does Obama believe that restrictions on interstate branch banking should be brought back?,” Ramesh asks. “Does Cohn?”
Well, no. (Actually, I’m not sure--I really don’t know much about that law. But I like my ATM card, so I’ll take it on faith that it’s been a beneficial reform.) Factcheck and Ramesh have a point here: The word “banking” in the McCain quote does not, strictly speaking, seem to mean what Obama has implied.
But the precise definition of "banking" here is really of minor substantive consequence. The larger issue raised by Obama (and me) is whether McCain’s health care plan would treat health care with the same kind of deregulatory zeal that’s proven so disastrous on Wall Street. And here, I continue to think, Obama is absolutely, positively correct.
McCain, like most conservatives, believes that a major problem with health care today is the excessive regulation of health plans by the states. That’s why he wants to allow people to purchase individual insurance policies across state lines--so that they can circumvent those regulations.
This isn’t some secret agenda. It’s one the McCain's campaign's talking points. Back in April, when McCain introduced his health care plan during a major speech in Florida, he called the cross-state purchasing of insurance “a crucial step in ridding the market of both needless and costly regulations.”
As the quote implies, McCain thinks that reducing regulation will unleash greater competition and, ultimately, do more to reduce the cost of medical care than more liberal reforms. Ramesh, unless I’m mistaken, believes the same thing.
Obama disagrees. He thinks the case for regulation is often stronger than conservatives concede, as the crisis on Wall Street shows. That's the argument he's making about McCain's health plan, both in speeches and in the new ad. As I wrote on Sunday, that seems fair to me.
Update: More on this controversy from NPR's Julie Rovner. Pay particular attention to the quotes from state insurance commisisoners in Iowa and Oklahoma, who worry how a proposal like McCain's might affect their constituents.