Topics: Barack Obama

Political posturing and corporatist collusion: The backstory of Obamacare’s imperiled employer mandate

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Beltway Confidential,Timothy P. Carney,Barack Obama,Obamacare,Health Care,John McCain,Analysis,Employer Mandate

The latest wheel to fly off the Obamacare wagon is the employer mandate — the policy that would force large employers to offer insurance, punishing those who offered insufficient insurance benefits with a big ol’ fine.

The Treasury Department announced Tuesday night it would not comply with the Affordable Care Act’s requirement to enforce this mandate come January, but would postpone it. January 2014 is the alleged date of implementation now.

But a few writers on the center-left — such as Josh Barro of Business Insider and Ezra Klein of the Washington Post — are saying what I’m thinking: Obama ought to kill the employer mandate altogether. The left-right agreement comes from the observation that employer-based health-insurance is an odd and not terribly efficient biproduct of bad New Deal legislation.

If liberals (including Ezra Klein, possibly Obamacare’s single biggest booster working for a mainstream publication) think it’s bad policy to force employers to cover employees, why is this provision in the bill?

To find the answer, start looking in the usual places: Political posturing and corporatist collusion.

Back in 2008, perhaps John McCain’s best policy proposal was to try and introduce market forces into health insurance by getting rid of the tax favoritism for employer-sponsored insurance, and making it up to people by giving everyone who has any insurance a tax credit instead.

Because McCain supported this policy, Obama had to attack it. This is standard politics, and Sen. Obama, despite his talk of Hope & Change, was a standard politician. Obama savaged McCain for this, accusing him of trying to “shred” the employer-based system. Such shredding would be beneficial, but McCain was unequipped to make that argument.

So, candidate Obama positioned himself as the champion of employer-based insurance.

Then came the cozy corporate-union-think tank cooperation. Liberal blogger Matt Yglesias proclaimed ”change is in the air” when the largest private-sector employer, Wal-Mart, teamed up with “Obama’s union,” the SEIU, and Wal-Mart-funded Center for American Progress to back the employer mandate.

Of course, all regulations fall more heavily on the smaller businesses, and everyone is smaller than Wal-Mart.

But McCain and Ezra Klein were right, and CAP, SEIU and Wal-Mart were wrong: Propping up the employer-based system and adding to the hiring penalty is bad policy. On one side was good policy. On the other side was political opportunity and corporate alliances. So we got bad policy.

Kudos to Obama for freeing himself from his past mistakes.

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