Deficit May Prove Obstacle for Senate Health Measure

If the health care reform effort were a boxing match, the Democrats would just have suffered a massive body blow:

Bloomberg: "Concerns about the federal budget deficit may thwart efforts by Senate Democrats to pass legislation this month calling for the biggest expansion of the U.S. health-care system since Medicare’s creation in 1965.

The Senate Finance Committee, which had planned to approve its version of a health-care bill as early as today, scrapped a vote to give the Congressional Budget Office time to complete a cost assessment. The delay threatens to dash plans by Senate Majority Leader Harry Reid to start debate in the full Senate next week after combining the measure with one from the chamber’s health committee."

The Senate trying to race the clock and beat the S&P 500's looming retrenchment is like Tyson trying to stay on his legs while getting his ribs hammered by uppercuts on the inside from Lewis, with foreign central banks playing the role of Lewis. (The GOP don't qualify for much other than radio commentary these days.)

Now, in the next couple of days, Democrats will have to lie through their teeth argue that the budget is in good shape and that this process can proceed to a full debate without the need to wait for news from the Congressional Budget Office. While they try to make that argument, the markets will continue to respond to news that the dollar will soon be replaced as both the world's reserve currency and the de facto metric for the value of petroleum.

In politics as in boxing, absolutely everything is connected to some degree. As I've said before, the Democrats are trying to climb a burning ladder with health care reform. Just like a boxer who has suffered too many body blows and is having trouble staying on his feet, their efforts to enact reform on this subject stand to get hammered by a weakening dollar, a burgeoning debt, growing cynicism about the foundations of the U.S. economic system from the all-important foreign central banks, and two rapidly deteriorating war efforts. Support is eroding right beneath them as they try to continue.

A political analyst has to learn how to see the whole fight, not just what the boxers' fists are doing, but also what their legs are doing. The Democrats cannot ignore the body blows from the rest of these issues forever.