Checking Out

By Richard Lacayo

When F. Scott Fitzgerald pronounced his famous definition of a first-rate intelligence -- the ability to hold two opposing ideas at the same time and still function -- he offered an example the Clinton Administration seems to have taken to heart. "One should be able to see that things are hopeless," Fitzgerald wrote, "and yet be determined to make them otherwise." That could be a job qualification for White House aides. In a summer when health-care reform has run into one deadly obstacle after another, the Administration never abandoned its line that all things were still possible.

Until now. At the very moment when the President and his advisers are gratefully celebrating their crucial, complex victory on the crime bill, they have settled into a painful admission. Comprehensive health-care reform -- meaning the ambitious kind that would produce something like universal coverage -- is dead for this year, perhaps for the rest of Clinton's term.

That's the hard lesson the President was confronted with last week. After almost a year of wrangling, when all is said and done about health care, less will be done than said. Even the prospects for a modest plan based on the proposals of the 20 or so Senators who call themselves the Mainstream Coalition are decidedly iffy, so much so that Clinton is signaling he may settle for an even more modest outcome -- a piecemeal collection of insurance changes. And if major changes don't get through this Congress, don't expect reform to find a warmer welcome in the next one, where Republican numbers -- and the general air of partisan belligerence -- can be counted on to rise.

Earlier in the week, when he went public with criticism of the mainstream proposal, Clinton appeared to have given up hope of any sizable achievement. "It will be better not to do anything at all," he said in a speech, "than to adopt a program that would actually increase costs of health care and reduce coverage." One day later came the miracle of the crime bill. With that victory fully in mind, and with his own reform plan going nowhere, Senate majority leader George Mitchell seemed to move away from the bill he introduced a few weeks ago and embarked on an attempt to negotiate a compromise based on the mainstream proposal.

When minority leader Robert Dole made conciliatory noises, a last-minute save seemed at least doable, if not probable. "I believe we can still reach agreement on this kind of reform package that can help millions of people," Dole said, noting that things were now moving in the direction of his own plan. That one is even more scaled down, offering mostly subsidies and insurance reforms. By showing his peaceable side, Dole will offend the tooth- and-claw wing of the G.O.P., who say they have more to gain this November by denying Democrats any hint of a victory on health care. But as a congressional leader and presidential hopeful, Dole has to worry about leaving voters with the impression that obstructionism is a Republican Party principle. Though he had opposed cigarette taxes as a financing mechanism, Dole indicated that now he would accept one.

The President endorsed Mitchell's new posture. Asked by reporters, he declined three times to repeat his threat to veto any bill that does not provide universal coverage. White House aides think they can offset the image of Clinton the flip-flopper by playing up the image of Clinton the man who at least made the first important steps in the direction of change. Even so, the President is wary of the mainstream plan. While it offers a promise of keeping health-care inflation in check, which was one of his goals, it aims to reach just 93% of all Americans by 2004 -- still short of his definition of universal coverage. That might not rattle the middle-class voters who are largely covered, but another of its shortcomings could be a political danger. The plan would cut Medicare deeply, without helping elderly Americans pay for prescription drugs or long-term care. As now conceived, it could make Clinton a target of their not inconsiderable fury.

The mainstream plan also contains what may be a serious policy weakness. It calls for community rating, which has the effect of narrowing the gap between the low premiums paid by the young and the high premiums paid by the elderly. But it doesn't mandate universal coverage, which would prevent the young and healthy from dropping out of insurance pools entirely rather than pay higher premiums. That in turn would lead to even higher premium costs for anyone who stayed in the pools -- and to another political problem for Clinton, who would be blamed by this constituency on Election Day.

Republican mainstreamers have their own suspicions about a compromise. "We didn't see this plan as one more step on a continuing march to the left," says Republican John Danforth of Missouri. "If they ((liberal Democrats)) are going to get the support of the mainstream coalition," adds Rhode Island's John Chafee, "they just can't make sizable changes in it." That could mean that the mainstreamers won't budge on their insistence on specific provisions that would limit federal health-care spending and on some cost-control requirements, perhaps via a cap on tax deductibility for employer contributions to their workers' health plans. Both labor and business are opposed to a limit on deductibility.

If Mitchell and the mainstreamers fail to cut a deal, the Administration's fallback is to swallow hard and accept a package of piecemeal insurance reforms. Those would probably include requirements that workers could take their insurance with them when they change jobs and provisions that would forbid insurers to deny coverage for people with previously existing conditions. The First Lady in particular is reluctant to put the White House behind halfway measures that could relieve pressure for more comprehensive change later on. And the President is concerned that such a bill could have the effect of raising premiums or boosting the health-care costs of senior citizens, for which he would take the heat. But Leon Panetta, the White House chief of staff, now says the President would be willing to "look" at a minimalist bill.

For Clinton that would be a scary sight, given the big hopes the Administration once had. But in a TIME/CNN poll taken Aug. 17-18, less than half of those surveyed said it was important for Congress to reform the health-care system this year. Only 28% said they were confident that Washington would produce a worthwhile plan. So nothing -- or almost nothing -- may be a political advantage to whoever does it. As the man most identified with the call to action, Clinton has been brooding privately about how Americans seem to have lost their enthusiasm for wide-ranging health-care reform. As much as they want change, he tells listeners, they fear government's ability to make it. "As we say at home," he observes, "a lot of people think government would mess up a one-car parade."

To some extent, Americans have become more nervous about health-care reform because the general idea has coalesced into the prickly specifics. But the Clintons also drove the process in ways that frustrated their own intentions. The closed-door sessions of the First Lady's reform task force were a public relations disaster, and the plan that emerged thumped onto the table with the sound of a massive government program.

When they trudge back after Labor Day to the House of Pain, or Congress, as the place is still known officially, Democrats are going to try to turn health care into another narrow victory. They have a President who seems to be good at that -- getting them victories, but in ways that make it inevitable they will be narrow.

With reporting by James Carney, Michael Duffy and Dick Thompson/Washington