Has Obama run out of gas on health care?

With Barack Obama demanding yet more prime-time television attention this week with a joint address to Congress on health-care reform, one might have expected the President to use his weekly address to set the stage for the speech.  Instead, Obama delivered a proposal for retirement savings that seems practically designed to avoid controversy.   Has Obama’s health-care push run out of gas?

Among the changes are expanded access to 401k plans, small tax policy changes and a pledge to let workers convert vacation days into retirement savings.

The president framed the new policies as a response to the recession.

“I’ve heard from so many who’ve had to put off retirement, or come out of retirement, to make ends meet,” Obama said in his weekly address.

But the president also suggested that the recession should be a wake-up call to structurally change the American economy.

Even before the recession, Obama argued, Americans saved too little and borrowed too much.

If that’s true — and it is — then Obama himself has become part of the problem.  The FHA is about to get into deep, deep trouble over their low-cost loans to marginal borrowers as a means of blunting the deflation of the housing bubble.  The Cash for Clunkers program encouraged Americans to sink deeper into debt by ridding themselves of cars they fully owned in favor of big loans to buy new vehicles.  Obama is hardly alone in this, but he joins a series of Beltway scolds that wag their fingers at American personal debt while pushing programs favoring constituencies that rely on it.

Otherwise, Obama’s proposals seem almost timid.  No one will object to adjusting tax laws to allow for greater 401K participation, especially for using tax refunds to bolster savings accounts.  Automatic enrollment for small businesses will help them compete against larger corporations in the labor market.  Obama pushed for mandates on businesses to create retirement accounts for their employees, which will run into resistance in Congress, but pointedly did not include such mandates in his proposal.

Obama appears to want a way to ride out the end of summer without taking any more of a bruising.  Why else would Obama suddenly shift gears to a proposal that hardly needs a weekly address to sail through Congress?  He certainly doesn’t need grass-roots support for such a proposal.  Obama offered it in order to rebuild, in some small way, his credibility as a moderate who isn’t interested in government takeovers — just a few days before he faces the nation on the government overhaul of the private health-care industry.

My representative, John Kline (R-MN), stuck to the main topic in the Republican rebuttal:

Lawmakers should scrap the current healthcare bill and start over, Rep. John Kline (R-Minn.) said Saturday. …

“It’s not too late to start over,” Kline urged in the weekly Republican address. “It’s not too late to do better.”

And as Congress reconvenes from a month of town hall protests, Kline said Americans were right to be upset at the prospect of Democratic reform. …

“Democrats have crafted this legislation behind closed doors, creating a partisan blueprint that – at last count – clocked in at more than 1,000 pages. It’s complicated, it’s convoluted, and it’s quite simply not going to work,” he said.

Kline does a good job of hammering Democrats on both substance and process.  American voters have become suspicious of both, especially attempts by both Obama and Pelosi to jam such a huge undertaking through Congress in a few short days.  Tactically, this was a tremendous mistake, as it piqued curiosity and distrust about the bill and got people reading it.

Contrast that with Obama’s retreat from the subject today.  Five weeks ago, it was the most critical issue facing this country, and Obama argued that even a few day’s delay would be disastrous for the nation.  Today, it has become so unimportant that Obama decided to talk about retirement accounts instead.  That’s a huge climbdown from the end of July, and a big indication that the administration wants to extricate itself from the debacle in any way it can.

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