Presidency on the line

January 29, 1992

George Bush bet his presidency last night on an up-tick in the economy before election day. Yet compared to what his Democratic foes are proposing, his State of the Union address was a modest beginning to his campaign for re-election.

On what may be the hottest political issue of the year, Mr. Bush spurned Democratic calls for massive health care insurance reform through a "play or pay" plan that would force employers either to provide their employees their employees with coverage or contribute to a government-controlled pool. Instead, he stuck by what he called "our own private health care system." To provide coverage for perhaps half the 35 million American workers who now lack any kind of coverage, he proposed a tax credit of up to $3,750 for low income families to finance their choice of health insurance and medical care.

Mr. Bush couched the issue in strak terms by suggesting Americans will reject "a nationalized system which will restrict patient choice in picking a doctor and force the government to ration services arbitrarily. "Actually, he was describing a Canadian-style approach fostered by only a minority of Democrats--presidential hopeful Sen. Bob Kerrey among them. The "play or pay plan," originally proposed by a bipartisan national commission, would be a hybrid system.

What still needs to be thrashed out is how any of these health care plans would be financed. Because the fast-rising cost of Medicare and Mediciad is pushing the federal government ever deeper into debt and putting state governments through the wringer, these entitlement programs might have to be crimped to finance health care reform. And therein lies a political mine field--one incumbents may try to avoid by muddying an already complicated and confusing set of variables.

Far simpler will be the coming debate over a "middle class tac cut." Mr. Bush resisted Democratic appeals for a break for average taxpayers that would be paid for bvy soaking the rich. Instead, he came up with his one surprise of the evening--a revision of withholding tax tables that will recieve a year hence.

The president's decision to halt new government regulations and emphasize tax breaks to spur investment and revitalize the real estate market was designed to bring Republican conservatives back into camp. As for the Democratics, the president was eager to do battle. But the struggle will do him little good, even if he wins on debating points, unless the economy turns around.

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