In “Fits policy, how likely are his withdrawal in the 119th congress?” Political scientist Jordan Ragusa forms a number of conditions that should obtain if the withdrawal of the policy of the past is to succeed. He makes very good points.
The most important example of a successful withdrawal that I know is one that does not meet all the criteria of Ragusa: the withdrawal of the Medicare Catastrophic Coverage Act by Ronald Reagan. I remember well. I was sick from school that day, and I turned on C-span to view the mood. I realized that I looked at something historically: the withdrawal of a rights program. Those are one of the most difficult programs to withdraw.
How and why did it happen so quickly after the law was adopted the previous year? I used to give the example in my class when I gave a segment about public choice. Public choice offers the answer.
The usual program that passes is one that imposes scattered costs to create concentrated benefits. Think of the farm program, which charges tens of millions of people, and imposes costs on more than 300 million consumers, to subsidize around 3 million farmers. Or think of Medicare, who charges more than 160 million people to subsidize 66 million people. [Note: this difference with Medicare and taxpayers is not as stark as I expected when I started writing this post: I had expected that under 50 million people were subsidized by Medicare.]
But Reagan’s act was different. It gave catastrophic care benefits to everyone in Medicare. But to finance the benefits, it imposed higher taxes on only the highest income receivers from Medicare.
Here is how New York Times Reporter Carl Hulse Put it:
Angry Americans vote indignation if he is asked to pay more for health coverage. Wetgevers and the White House say that the public does not appreciate the benefits of the new Health Act. Opponents call for withdrawal before the program starts completely.
He got an important verb wrong. They were not ‘asked’. If they were asked, they would probably not have had a problem with the program. They were forced. That is how taxes work.
The measure was adopted with a dual vote: 328 to 72 in the house and 86 to 11 in the Senate.
But once higher income, seniors saw their new taxes, they were pissed off.
Hulse wrote:
The dramatic climax arrived on September 17, 1989, when representative than Rostenkowski, the Nors and the sulfur chairman of the Ways and Means committee, in his district in Chicago, a group of angry older voters. They surrounded and blocked his car and forced him to escape on foot before he could make his car. A new team caught the episode on camera.
The video he refers in the quote above, which is only 1:27 tall, is worth watching. Many people saw this.
The following month, The congress voted to withdraw. The mood was dual.
The reason that this illustrates an insight into the public choice is that the costs of Reagan’s account of 1988 were concentrated and the benefits were distributed.
Interesting remark: Rostenkowski later went to the prison for post fraud. Here is something Wikipedia writes:
Costs against Rostenkowski include: keeping “ghost” employees on his payroll (paying salaries against taxpayers costs for ‘jobs’ without show); Use congress funds to buy gifts such as chairs and ashtrays for friends; distracting funds from taxpayers to pay for vehicles used for personal transport; mess with a Large jury witness; And trade in officially purchased stamps for cash at the post Office of the House.[22][23]
The photo above is from Rostenkowski.