Tuesday, April 1, 2014

The Big Picture on #ObamaCare's Politics

From Jay Cost, at the Weekly Standard:
Unlike Medicare and Social Security, Obamacare creates clear winners and clear losers. Of course, people end up losing in the deals in Medicare and Social Security (e.g. a person who has worked his whole life but dies at the age of 59 and thus never collects), but such people are never actually aware of the loss. Obamacare losers know that they have been made worse off, just as its winners know that they have been made better off.

Losers in the schema include people whose new insurance is more expensive or otherwise less satisfactory because of the new regulations, seniors whose Medicare Advantage program will be peeled back (or whose local hospital stops taking them because of cuts to Part A), businesses who cannot afford the mandates, people who lose their employer insurance as a consequence of the new business mandates, young and health people who, and others. Importantly, the administration's delays speak to the potential coalition of the losers, as almost all of them have been designed to keep these groups from realizing the harm they are due to suffer before the 2014 midterm election.

Two inferences to be drawn from this, one moral and one political.

The moral inference: Shame on the Democrats and the left for setting up Obamacare this way. The people who are losers in this schema have long been protected by both sides in an unwritten political agreement, which vouches that the only people the government "takes" from are those with plenty to spare. The rule was: you do not redistribute money and security away from the middle class to accomplish some policy objective. The Democrats broke this rule, largely out of cowardice. They wanted to hide the trust costs of the legislation. Rather than put together a straightforward tax that hit everybody equally (like the Social Security tax), they created a convoluted system to fund the program, such that people whose premiums have gone up are paying an implicit tax, one that happens not to be collected by the government.

The president deserves particular criticism. The president is the one elected official who can claim to represent all the people and thus has long been the agent to vouchsafe this political bargain. Barack Obama broke the deal, and he lied about it, to boot, with, "If you like your plan, you can keep your plan."

Next time you hear a liberal talking about radical conservatives breaking generations of tradition, remember that Obamacare is actually the break with the past. And a perverse one at that.

The political inference: The politics of this moving forward is a lot more complicated than people on both sides seem to think. This law cannot be repealed in a straightforward manner, nor is it securely in place. That is because there are winners and losers to be mobilized on both sides. The final fate of Obamacare depends upon (a) the relative size and strengths of both groups; (b) how well the two parties bid for their support.

This, then, is the goal for conservatives moving forward. The next week the Democrats and their water carriers in the media will cheer about how Obamacare is vindicated because of 6-7 million "enrollments." Nonsense. The real battle is going to be fought over the next few election cycles, as both sides mobilize their coalitions. Republicans must mobilize the losers and also present an appealing counter-offer to the winners. In any new program put forward by the GOP, people who are made better off under Obamacare must be left at least as well off. Not only that, but the program must be straightforward enough that Obamacare's winners will be able to understand clearly that in the GOP proposal their benefits will not disappear; after all, the Democrats and their friends in the media will do anything and everything to convince these people that they will be made worse off.

Importantly, this was the political landscape of Obamacare six days ago, six weeks ago, six months ago. The bill was bound to create winners and losers by its very design; indeed, a careful read of reports from CBO and CMS at the time of passage indicated that very clearly. The goal for the GOP is to build a coalition that combines the losers, and a critical mass of winners, to replace it with something that is better.
Oh, that oughta be a cakewalk!