State of the Union: A Good Idea Inside a Bad One

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Still, if Democrats are right to dismiss Bush's overall plan as too little, too late, they're wrong to dis his call to reform today's regressive health-tax exclusion. A nearly invisible $200 billion subsidy that tilts its largesse toward executives in high tax brackets and workers who already have rich plans would normally be assailed by liberals as unjust. But because this particular subsidy bolsters hefty benefits negotiated by their union allies, Democrats overlook the inequity. "It's ironic and embarrassing," says Len Nichols, a former Clinton health official now at the New America Foundation. Farsighted Democrats admit as much. Andy Stern, the leader of the Service Employees International Union, and Jim McDermott, a doctor and a Democrat from Seattle on the Ways and Means Committee, tell me that if universal health coverage were being discussed, they would revisit the sacred tax exclusion as a way to help fund it.

Bush's nervy war on our wrongheaded health-tax subsidy will probably go nowhere, but it's destined to be revived if Democrats get a shot at comprehensive reform after 2008. Even a President as unpopular as Herbert Hoover probably had a good idea or two eventually to steal too.