In 1993, the vast health care plan of the Clinton administration died without a vote being taken in Congress. Known as Hillarycare after its champion, the president’s wife, it left its mark on the new administration. In the midterm election of 1994, Democrats lost control of the House for the first time in 40 years.
In 2010, the Obama administration pushed its own sweeping health care program through Congress. We know it as Obamacare. Having lost the House in 2006, Republicans won it back in 2010, thanks to the unpopularity of Obamacare.
There’s a lesson in what happened to these two administrations. It’s a simple one: Leading with a big health care initiative is dangerous for a new administration. It throws the president and his party into a thicket of rules, regulations, subsidies, and prices, and forces them to deal endlessly with health care interest groups that are never satisfied. Presidents Clinton and Obama never really escaped the thicket.
President Trump won’t either if he makes repeal and replacement of Obamacare his first and biggest issue. Even if he and Republicans come up with a worthwhile plan, as I expect them to, they’ll still be courting trouble. Health care is a Democratic issue. If Democrats can’t succeed, they’ll make sure Republicans fail too. Besides, health care is too big for one party to swallow.
To make matters worse, Republicans are off to a nervous start. They’re undecided on how much of Obamacare to salvage—a little or none—and exactly how to do it. They’ve made people wonder if they’re up to the task. And Trump isn’t any help with his iron insistence on killing Obamacare as the first order of business.
The fallout is surprising, but shouldn’t be. Obamacare is suddenly more popular than not. An NBC/WSJ poll in January found that 45 percent of Americans now think Obamacare is a good idea and 41 percent a bad idea. This is the first time since Obamacare was enacted six years ago that it’s above water. A Fox poll found the same thing last month, with Obamacare seen favorably by 50 percent, unfavorably by 46 percent. Two years ago, 38 percent were favorable, 58 percent unfavorable.
The political problem for Republicans is that they may become indentified as the party of, for lack of another name, Trumpcare. It will be hard not to improve over Obamacare. But the press won’t report that. It’s too committed to finding fault with Trump to give him credit. Neither will the liberal elements of the health care lobby. And it will take a few years before a majority of Americans realize their health care is better and cheaper.
But there’s a way for Republicans to keep their struggle against Obamacare from overshadowing every other priority. The GOP schedule for Congress calls for repeal of Obamacare in early spring. And tax reform—with cuts in corporate and individual income tax rates and repatriation of overseas profits—is slated to reach the president’s desk by late summer.
What makes sense is to flip the two issues and pass tax cuts first. True, there are drawbacks. Repeal of Obamacare will reduce the budget baseline, thus allowing for deeper tax cuts. And there’s the fear that postponing repeal will cause support to dry up.
Those are serious concerns, but the need to spur economic growth and reassure financial markets is immediate. Obama left behind a weak economy with 1.9 percent growth in last year’s fourth quarter. Recovery from the financial collapse of 2008 never amounted to much. And the notion that Obama warded off a depression is pure myth.
The Trump bump in financial markets turned out to be brief. Financial markets have settled down since the arousal of animal spirits after the election. The Dow rose 6 percent in November, 3 percent in December, and a meager 0.08 percent in January. Investors, like all of us, are waiting to see what Trump will do.
Grover Norquist, the president of Americans for Tax Reform, says Trump could promise that tax cuts will be made retroactive to January 1, then go ahead with health care first. That’s not a bad idea. But a full-blown package of tax cuts would be far better, particularly a long overdue cut in the business tax rate to 20 percent from 35 percent. That would be more tangible than a Trump promise.
Democrats are unlikely to vote for tax cuts alone. Economist Steve Moore says infrastructure spending could be added to the tax legislation to attract Democratic votes. Trump is eager to get together with Democrats on repairing roads, bridges, tunnels, ports, and airports anyway. “Why not get something for it?” Moore asks.
To maximize their punch, tax cuts should go into effect immediately. President Reagan’s tax cuts were phased in over three years, which prolonged a deep recession. When fully in place, the economy exploded. The result has a name: the Reagan Revolution.
The case against leading off with an enormous health care program is not new. Clinton could have started with the most popular promise from his 1992 campaign—welfare reform—according to Democratic pundit Mickey Kaus. Instead, Clinton chose Hillarycare and didn’t get to welfare reform until 1996. In between, Democrats sacrificed the House.
Obama’s chief of staff Rahm Emanuel urged the president not to begin with health care. “I told him many times [about] the political cost of doing so,” he says. Obama didn’t listen and the cost was high. The Democratic party was devastated.
Therein lies a lesson that Trump and friends need to contemplate. The midterm election is only 21 months away. ¨
Fred Barnes is executive editor of The Weekly Standard.
