Budget and Debt Theatrics

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Dean Baker
The Hankyoreh (South Korea), October 14, 2013

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The current budget standoff between President Obama and the Republican controlled House of Representatives is the most bizarre political battle in modern U.S. history. The cause of the standoff has little to do with the budget itself.

Rather this is all about the determination of the Republicans to kill Obamacare, the health care reform put into law in 2010, before it actually goes into effect. With the core provision, a network of 51 state level insurance exchanges, beginning to provide insurance in January, this is the Republicans’ last chance.

While this bill is potentially very important to the country, in that it will guarantee the vast majority of citizens affordable health care insurance, it is also hugely important to Republicans in Congress. They have been railing against the bill for the last four years.

Before the Affordable Care Act (the name of the bill that created Obamacare), was approved congressional Republicans did everything possible to obstruct its progress in Congress. Not a single Republican member of the House of Representatives voted for the bill in either its final form or in any of the various permutations that had come to a vote before final passage.

In the Senate, where the rules make obstruction much easier, Republicans had the bill tied up in committee for much of 2009 as they proposed amendment after amendment to the bill. Since it is unlikely that any of these Republicans ever intended to vote for the final bill (none did), this was most likely just a delaying tactic.

After the bill passed both houses of Congress and was signed into law by President Obama, the Republican strategy was focused on blocking its implementation. One part of this strategy was a Supreme Court challenge. To the dismay of millions of Republicans across the country, the Republican dominated court upheld the law as constitutional. Chief Justice John Roberts, who was appointed by the second President Bush, switched from his original position that the law was unconstitutional. Roberts ended up voting with the judges appointed by Democrats to give President Obama a narrow 5-4 victory on the court.

However, Roberts did knock away one important provision of the law. He, along with the other Republicans, ruled that the federal government could not force state governments to expand Medicaid, the state-federal health care program for the poor. They ruled that the decision as to whether or not to expand Medicaid had to be left to the states.

This gave Republicans across the country another route for resisting Obamacare. Nearly all of the states that have Republican governors refused to go along with the expansion of Medicaid even though the federal government picks up 90 percent of the cost under the ACA. This not only denied millions of poor people money, it meant that hospitals, doctors, and other providers in these states would not get the benefit of the funds appropriated under the law. But the Republicans’ priority was obstruction.

In this vein, nearly all of the states controlled by Republicans refused to set up their own state-based exchanges. They allowed the federal government to take on this responsibility itself. Meanwhile, Republicans in Congress voted to cut off federal funding for constructing the exchanges after the Republican takeover in the 2010 election. As a result, getting the exchanges up and running by October 1, 2013, the first day that people can sign up for insurance, was a much more difficult process than it should have been.

But in spite of the Republicans’ efforts at obstruction, the exchanges did come on line as scheduled, in spite of a number of computer glitches reported at various sites around the country. People have begun to sign up for the program in large numbers and there appears to be genuine interest around the country.

This is why the situation has suddenly become so desperate for the Republicans. They had not just opposed Obamacare, their top leaders had described the program in apocalyptic terms, implying that if it went into effect that at least the United States health care system, if not the country itself, would be destroyed. They created endless fabrications about how the plan was a government takeover of the health care system and that it amounted to bringing socialism to the United States. In fact, Obamacare was derived from a plan developed in the early 1990s by the Heritage Foundation, a conservative Republican think tank.

As long as Obamacare just existed on paper, the Republicans were pretty much able to say anything they wanted about it since few people knew the details of the program. However once people could see that Obamacare was giving them affordable insurance, they would understand what the program was. Even worse from the standpoint of the Republicans in Congress, they would probably like it.  Obamacare would likely be placed in most people’s minds alongside Social Security and Medicare, huge government programs that are seen as providing essential security by people across the political spectrum.

Not only would Republicans likely lose support from independents, they also risk angering their own base. When Republican voters realize that the horror stories about Obamacare are not true, they may come to resent the party leaders who had worked so hard to keep them from getting health insurance. For the Republican leadership this is a disaster for which they are prepared to shut down the government.


Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University.