Health Care and Stimulus


I’m 100 percent on board with Jon Chait’s argument that there’s no reason to think that abandoning the Affordable Care Act would have improved Democrats’ political standing heading into the midterms. Insofar as ACA is unpopular, that’s largely a consequence of the general decline in public esteem for the party currently overseeing a grinding recession. The specific subject of health care is, along with the environment, one of two topics on which Americans currently say they trust Democrats more than Republicans:


As Chait says, the more interesting idea is that perhaps they “should never have taken up health care in the first place, and used their time pushing some kind of economic stimulus issue.” I think assessing that depends really on what you mean by “the Democrats” and “should.” If it’s actually the case that by agreeing to not pursue the ACA in the 111th Congress, Barack Obama could have persuaded the legislative pivot points to embrace a much larger and more effective stimulus then I think that, yes, he should have done that. But I don’t see any plausible argument that this would have worked.

But here’s a more plausible tactical counterfactual. The administration decided, as a matter of political strategy, that it was not only crucial for the bill to “bend the cost curve” over the long-term and reduce the long-term deficit, but also to score as deficit-reducing within the 10-year CBO scoring window. Given that the law is largely structured such that its main components don’t even phase in until 2014, the 10-year score is basically irrelevant on the merits, it’s just a kind of political talking point. If the administration had not been committed to a strategy built in part around this talking point, then it strikes me as plausible that ACA could have been written so as to be a vehicle for substantial short-term stimulus, primarily by doing something with Medicaid funding. As best I can tell, however, nothing along these lines was seriously contemplated on either the congressional or presidential end. Instead, there was near-universal agreement on the dubious proposition that the deficit talking point was of critical value.