Tuesday, July 3, 2012

More on Obamacare – The President Must Defend His Base

Last week I posted a blog about how the Roberts Court broke Obamacare.  By redefining the mandate as a tax and by striking down the penalties for States who do not increase their participation in Medicaid, the program is no longer deficit neutral, which was a major selling point of the President when the program passed.  Romney wants to repeal and replace Obamacare with the press pressuring him to identify what he will replace it with.  My blog suggested that the press should also ask President Obama how he would fix the program to bring it back to deficit neutral.     

There was some interesting politic theater on Sunday in the morning news programs.  Jack Lew, the White House Chief of Staff, was interviewed and insisted that the tax was not a tax, but a penalty.  Mitch McConnell, the Senate Minority Leader could not articulate the program the Republicans will propose as a replacement for Obamacare, or what is formally the Affordable Care Act.  Though the Republican leader can wait for Romney to define the replacement program, Jack Lew is in a more precarious situation.  He is redefining the term used by the Chief Justice in settling the issue of the mandate.  It will be easy for Republicans to criticize this, and the credibility of President Obama and his White House Staff will decrease as a result.

There is a more interesting political effect from the decision.  It has put President Obama on the defensive to a point that he must protect his base.  Let’s go back to Keith Hennessey’s article on the mandate and who will pay it.  Keep in mind that the health care tax, a regressive tax, is a single amount of $750 per adult and $375 per child regardless of income.  This means that as income remains low, the portion of income paid to support this tax will be high.  There are 400,000 people made up of singles making $11,800 or less per year and families of four making $24,000 or less.  For the single person, that is 6% or more of income.  For the family of four, that is 9% or more of annual income.  There are 600,000 people made up of singles making between $11,800 and $23,600, and families of four making between $24,000 and $48,000.  This means that singles in this group will be subject to a tax representing 3% or more of their income, and families of four will be subject to a tax representing 4% or more of their income.

Keep in mind that the median income in the United States is about $45,000, and that the group making the median income and below generally favor the re-election of President Obama.   It is part of his base.  Though the tax will impact only about 1 million earners in this group, not everyone in the group will know by Election Day if they will be subject to the tax.  It is very clear that Republicans could communicate directly with this group that Romney will repeal this tax via direct mailers and targeted radio and television ads.

In addition, seniors have been upset since the passage of the Affordable Care Act over the fact that it cuts $500 billion from Medicare.  Republicans could target them with a message to restore that funding. 

Using a football analogy, President Obama has weakness in his defensive line and the fullback is coming through.  However, the Republicans need to keep one point in mind.  Though about 52% of the American electorate want Obamacare repealed, about a fourth of these want it repealed because they want a stronger government program, not less.  Republican arguments will only get them down the field.  They will not score a touchdown on that play alone.

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