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LIBERAL PUSH FOR HEALTH REFORM MAY BE LAST ENTITLEMENT GASP

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The health-reform debate that began in Congress a few days ago has been described as "historic." It is, but not because of the subject matter.

What we are watching may well be the last gasp of entitlement liberalism - the strange belief that improvement in the human condition depends largely on government largess.For the better part of the past three decades, Washington-style "compassion" has entailed a willingness to employ other people's money with little regard for the consequences. This mindset fueled a tidal wave of legislation, and backers congratulated themselves on their superior morality while bashing skeptics as cruel. Signs of trouble, however, began to appear as early as 1973.

That's when the economy moved to a slower growth path, for reasons still not fully understood. With the tax base increasing more slowly, we entered the era of chronic deficits, fed largely by the ever-increasing cost of such programs as Medicare, federal pensions, farm subsidies and food stamps.

By 1980, more than half the population looked to Washington for some sort of protection or subsidy. These programs, coupled with the interest in the national debt, now consume more than half of the federal budget.

Many people understand that we cannot continue as before, which is why the health-care debate seems so odd. Backers of the massive reform plans pushed by the Democratic leadership are behaving as if nothing has been learned from the past 25 years.

Never has the disparity between rhetoric and reality been more glaring. Maine Sen. George Mitchell tells us with a straight face that his version of health-care reform embodies "simple justice," but the details of his bill suggest more pedestrian motives, such as simple desperation: Ram something through. Ram anything through. Just do it.

The Congressional Budget Office says Mitchell's version of "simple justice" will destroy jobs and reduce pay for many workers. In practice, its subsidies will impose a huge implicit tax on the working poor, causing many to voluntarily leave the labor force. The measure will dump more burdens on the states, and its plan for a 25 percent tax on high-cost health plans may be unworkable. And that's only a partial list of problems.

Meanwhile, the goal of cost-containment seems all but forgotten. Martin Feldstein, chairman of the Council of Economic Advisers in the Reagan administration, examined the Senate Finance Committee bill - on which the Mitchell bill is based - and concluded that the CBO's estimate of the bill's hidden-tax features was probably $40 billion too low.

When you consider that the story of entitlements has been one of cost understatement, even Feldstein may be guessing low. Consider: In 1956, disability insurance was projected to cost $860 million in 1980. The actual cost was $15 billion.

A century ago, liberals sought to free the individual from arbitrary government power, but later the emphasis shifted to freeing individuals from economic risk. Since then, the greater part of liberalism's legacy has not been freedom but bureaucracy and a concomitant increase in the coercive power of government. The contradictory nature of liberalism is nowhere more apparent than in the health-care proposals desperately being pushed by the Democratic leadership in Congress.

Some sort of plan may yet pass, but one senses a turning point. The intellectual dishonesty of this debate - in which a massive bureaucratic power-grab attempts to masquerade as "simple justice" - has been revealing. Modern liberalism is collapsing under the weight of its own arrogance.