The political hot potato of U.S. Medicare

The political theatre in the United States this week has been all about the "debt ceiling": Congress voting not to increase it; President Barack Obama and the House Republicans meeting to discuss it; and the Treasury warning that failure to raise it will bring economic apocalypse for the United States and the world.

Elites like to accuse ordinary Americans of a lack of political sophistication, but everyone from Main Street to Wall Street is savvy enough to understand that so far, the fighting over the ceiling is pure Kabuki. As with the budget deal earlier this year, the real negotiating is unlikely to happen until the very last minute.

But everyone also understands that this summer game of brinkmanship matters because it is a proxy war being fought over a very real problem: the growing national debt and deficit. At just under 60 per cent of gross domestic product, the U.S. national debt is lower than that of France, Germany and Britain. And the rest of the world still seems delighted to lend the United States money on historically generous terms.

The need to tackle the deficit (although not how to do it) has become a national truth universally acknowledged. What nearly all Americans of all political stripes also understand is that the problem with the budget deficit is health care spending - which is why the most important economic initiative of the Obama administration not directly connected to the financial crisis and its aftermath was health care reform, and why the most important new economic policy proposal from the Republicans is Representative Paul Ryan's proposal to transform Medicare.

But here is what no one can figure out: what Americans want when it comes to sickness and the state. One of the changes Americans decided to believe in when they elected Mr. Obama in 2008 was health care reform, a central plan in his political platform. Yet when he actually acted on his health care pledge, it suddenly seemed as if the issue were anathema to voters.

Obamacare became one of the most effective rallying cries in the 2010 midterm elections, and the Republicans were emboldened to make the opposite of Obamacare - a cut in state support of health care, instead of an extension of coverage - the centrepiece of the most important conservative initiative this year, Mr. Ryan's budget proposal.

But the right's plan to cut back on state-supported medical coverage seems just as toxic as the left's effort to extend it. So which is it? Do Americans love state-financed health care or loathe it?

Maybe the confusion comes not from voters but from the way politicians, policy makers and pundits are framing the debate. Everyone who has a national voice in this discussion is a citizen of that lucky slice of America that enjoys Cadillac health care coverage, paid for by someone else, be it the U.S. government, in the case of elected politicians; universities and research organizations, in the case of the policy wonks; or mainstream media companies, in the case of the pundits. For them, the health care debate is an ideological issue; it's about the thrilling clash of ideas, or the exciting, painstaking effort to build an economic model that works.

But for most of the hard-pressed U.S. middle class - whose median wages have stagnated for the past decade - health care and the taxes that pay for it are two of the four pocketbook issues that determine the fate of their family (the other two are jobs and housing).

They are terrified of anything that further strains their budgets - including higher taxes that don't directly translate into a personal benefit. If you are a privileged liberal, it is easy to sneer at this unwillingness to pay for state benefits for other people as selfish. But if your family isn't poor enough to get Medicaid - the health program for low-income people - yet is struggling to get by, it makes perfect sense.

Many, on both left and right, argue that one of the absurdities of Medicare, unlike Medicaid, is that it is universal. Surely, they say, it is madness to provide equal benefits to the elderly rich and poor alike. Yet that universality is the reason Americans will never allow Medicare to be gutted, just as Europeans and Canadians will never give up their universal health care. People will pay for a good-enough system they know they can use, even if only in the final decades of life. And woe betide the politician who tries to take it away. But that does not mean, as Mr. Obama discovered, that it is easy to persuade them to pay for benefits that are not a real benefit to their family's bottom line.