The One-Termer We've Been Waiting For

The One-Termer We've Been Waiting For
By David Catron on 8.4.11 @ 6:09AM

In February of 2009, President Obama​ went on the Today Show to discuss a variety of issues, including his plan to turn the economy around. When asked about the consequences of failure for his presidency, he replied with unusual frankness: "I will be held accountable.… If I don't have this done in three years, then there's going to be a one-term proposition." The January 2009 unemployment rate had just been released a few days before that interview was broadcast, and it stood at 7.6 percent. Now, more than two and a half years later, the rate stands at 9.2 percent. Moreover, unemployment has only dipped below 9 percent in two of the past 26 months. This is the longest run of such rates since the Great Depression​. In other words, Obama's three years are nearly up and he most emphatically doesn't "have this done."

Even worse, an important driver of the dismal employment situation has been the President's "signature achievement," the ironically named Patient Protection and Affordable Care Act (PPACA). The law's numerous new taxes and other disincentives for job creation, combined with the uncertainty over its ultimate fate in courts, began dragging the economy back down almost immediately after Obama signed it in March of 2010. During the first 16 months of Obama's presidency, the economy was creating jobs at a reasonably healthy rate: "Between the recession's low point in January 2009 and April 2010, net private sector job creation improved by 67,600 jobs a month." Almost immediately following passage of Obamacare, however, monthly job creation flattened to less than 10 percent of that amount.

Is the assumption that PPACA prompted this slowdown in job growth a mere causal fallacy committed by right-wingers eager to damn "reform"? Not likely. While it is true that timing doesn't necessarily imply causation, there is other evidence. Consider the case of Boston Scientific Corporation. Like all medical device manufacturers, Boston Scientific found itself on the receiving end of a large tax increase when Obamacare passed. What happens when the federal government adds to the cost of doing business for a particular industry by raising its taxes? The companies comprising that industry find a friendlier and cheaper place to do business. Boston Scientific has responded by reducing its workforce, particularly in Massachusetts, and is "investing $150 million and hiring 1,000 people in China."

This shouldn't be a surprise. In May of last year, the Massachusetts Medical Device Industry Council said that 90 percent of its members would be forced to cut back due to the new taxes imposed on them by Obamacare: "[The] companies say they'll cut back on operational costs -- and jobs -- after a planned 2.3 percent tax on their products is implemented in 2013." And the job losses have by no means been limited to medical device firms. One of the ways PPACA "saves" money is by reducing payments to hospitals, and health care workers across the country are paying the price. In April, Washington Hospital Center announced that it would lay off 200 workers. In June, Piedmont Healthcare of Atlanta said that it would eliminate 464 jobs. This pattern is being repeated over and over again all across the country.

And all of this damage was done despite the vociferous objections of the voters, who made it obvious in town halls, huge public demonstrations, and off-year elections that we wanted the Democrats to abandon their fixation on health care and focus on jobs. But the President and his congressional accomplices simply ignored us. In fact, President Obama insinuated in his 2010 State of the Union Address that the voters objected to Obamacare primarily because we just didn't get it: "[T]his is a complex issue, and the longer it was debated, the more skeptical people became. I take my share of the blame for not explaining it more clearly to the American people." Then, he and the Democrats on Capitol Hill rammed it down our throats, insisting that it was necessary to get the costs of American medical care under control.

Which bring us to the most galling irony of all -- the Obama administration has now admitted that PPACA won't reduce costs. Last month, the Centers for Medicare & Medicaid Services (CMS) issued a report showing that health care costs will rise faster with Obamacare in place than they would have in its absence: "CMS officials attributed the growth to an expansion of the insured population. Under the plan, an estimated 23 million Americans are expected to obtain insurance in 2014, largely through state-based exchanges and expanded Medicaid eligibility." In other words, the President's "signature achievement" actually exacerbates the main problem it was ostensibly designed to solve. Obamacare will "bend the cost curve" upward while expanding the unemployment rolls.

So, getting back to that 2009 interview on the Today Show, it's pretty difficult to imagine that Obama will "have this done" by Election Day. Unemployment will still be high, and PPACA is the least popular entitlement in history. But will his prediction come true? Will he really be held accountable for sacrificing the recovery on the altar of government-run health care? Recent public opinion surveys suggest that he might. On July 29, Gallup reported that Obama's job approval rating had dropped to an all time low of 40 percent. And this was a survey of "adults aged 18 and over." His job approval numbers are doubtless even worse when only likely voters are surveyed. One can only hope that Obama is better at political prognostication than he is at being President.